House of Representatives
17 September 1974

29th Parliament · 1st Session

  1. House of Representatives
  2. 29th Parliament
  3. 1974

Mr SPEAKER (Hon. J. F. Cope) took the chair at 2. 1 5 p.m., and read prayers.

page 1235

DEATH OF HER EXCELLENCY LADY KERR

Mr WHITLAM:
Prime Minister · Werriwa · ALP

Mr Speaker, I move:

That this House expresses its profound sorrow at the death on 9 September 1974 of Her Excellency Lady Kerr, wife of the Governor-General, and places on record its appreciation of her meritorious public service and conveys its deepest sympathy to the members of her family.

Lady Kerr, for all her eminence as wife of the Governor-General and for all the lustre she brought to the role of consort, was a woman of distinction in her own right- a woman of rare qualities and remarkable gifts. She worked for much of her life in community causes. She was an active social worker, hospital almoner and marriage counsellor. She was the devoted and capable mother of a talented family. She was the close companion of her husband throughout his splendid career. She will be missed, above all, for herself.

It is a cruel blow that she was taken from us so soon and that Australia has lost the services of a woman richly equipped to support her husband in the high and difficult office he has undertaken for Australia and her people. Honourable members will recall that she was among us here on only one occasion- on the day her husband was sworn to the highest office an Australian can hold in his own country. Our thoughts at this time go out to Sir John Kerr. I am confident that the memory and example of his wife, the qualities of her mind and heart, will sustain him in his time of sorrow and strengthen him in the years ahead.

Last Thursday you, Mr Speaker, and I were among those who attended a memorial service for Lady Kerr at St James Church, King Street, Sydney. Some of us had known and admired her for a third of a century. In that historic church at the head of Phillip Street, next to Greenway’s Supreme Court building, where 36 years before she was married and where in the years between she had been a communicant member, we were bidden to give thanks for her life of affection and generosity, of personal concern and community service, for her high ideals and steadfast courage. I know that all honourable members will share those sentiments.

Mr SNEDDEN:
Leader of the Opposition · Bruce

– All Australians regret the tragedy that has befallen the Governor-General, Sir John Kerr, and his family. Lady Kerr’s death was a quite crippling blow to him, coining so soon after he had accepted Australia’s highest office. He has reached the pinnacle of a distinguished public career and in such he should have had, we would have hoped, the support of Lady Kerr in the discharge of his duties. The fact that she will not be there with him brings an understanding on our part of the difficulties that he will have.

Lady Ken’s death was all the more tragic because Australia has lost a woman who had a fine personal quality and who gave dedicated community service over a long period. It is a loss that will be felt widely among many community organisations with which she worked, such as the Marriage Guidance Council of New South Wales. Lady Kerr was a trained social worker. She was committed to the need to provide counselling and support to married couples facing stress. She was an executive member of the Marriage Guidance Council. In addition, Lady Kerr was a volunteer counsellor with the Life Line organisation and served on its adoption committee.

Lady Kerr continued to give this service to the community despite personal hardships that afflicted her. Her courage in overcoming those hardships was the finest example any person could have given of an individual’s self determination to make a positive contribution, despite personal needs, to the service of the community and the nation. Her life exemplified a spirit of thought for others before herself. All Australians will recognise the difficulties Sir John, the Governor-General, must now inevitably face and the sorrow his loss must cause him. Australians will extend personal sympathy to him and his family. The task ahead of Sir John will not be easy but in facing it he can know that he has the full support and understanding of his fellow Australians. On behalf of all members of the Liberal Party I extend sympathy to Sir John and his family in the loss of a distinguished woman.

Mr ANTHONY:
Leader of the Australian Country Party · Richmond

– I should like to associate the Australian Country Party with the expressions of condolence of the Prime Minister and the Leader of the Opposition to Sir John Kerr, our Governor-General, and to express our sorrow at the sad loss of his wife. He was appointed as Governor-General during a period of her illness but she showed enormous courage in not weakening for one moment during his promotion to that very high office. She was a lady who devoted her life to helping other people. She had enormous ideals and was a great example to the nation. In particular, she was very concerned with the preservation and the strengthening of the family as the foundation of our society. The circumstances are particularly sad in that Sir John lost his wife so soon after assuming his important position. The office of GovernorGeneral is indeed a lonely one but is now made ever so much more lonely for Sir John in not having his partner. Our sympathy goes to Sir John with our understanding of the very sad position that he is in at the moment.

Question resolved in the affirmative, honourable members standing in their places.

Mr SPEAKER:

– I thank honourable members.

page 1236

DEATH OF THE RIGHT HONOURABLE N. E. KIRK

Mr WHITLAM:
Prime Minister · Werriwa · ALP

I move:

That the House records its sincere regret at the death on 3 1 August 1974 of the Right Honourable Norman Kirk, Prime Minister of New Zealand from December 1972, and expresses to the people of New Zealand profound regret and to his family tender sympathy in their bereavement.

Norman Kirk’s death was a deeply tragic loss for New Zealand, Australia and the Pacific region. New Zealand has lost a great leader. Australia has lost a firm friend. The Pacific and South East Asian region has lost a forceful and creative spokesman. The cause of democratic socialism throughout the world has lost one of its pillars of strength and sources of inspiration.

My own sense of loss is acute and personal. Both of us came to the leadership of our Parties after the elections of 1966 and to office as Prime Ministers within a week of each other in the elections in 1972. We shared a common ground of political experience in good times and bad and an identity of basic beliefs which gave a closeness and value to our personal relationship quite beyond the ordinary. He was a man I knew well, a man I admired, a man whose personal qualities of integrity, compassion and sturdy common sense earned him the confidence and affection of all who had the privilege of working with him.

In no country save his own has his death been felt more keenly than here in Australia. Under his Prime Ministership relations between New Zealand and Australia reached a degree of cooperation and understanding of unprecedented intimacy and trust. We co-operated particularly closely in our opposition to nuclear tests in the Pacific. His opposition to those tests was an example to the world and an inspiration to all who supported him. It made him the natural and respected spokesman of the emerging community of Pacific potions- a community whose needs and aspirations, he understood better than any other leader in the world.

A week ago at the memorial service in St Andrew’s Church’ in Canberra I quoted the words he used tb describe his approach to foreign policy soon after his Government was elected. They were: ‘

We believe in the individual human worth and dignity of every man, woman” ‘and child, regardless of race or colour . . . Every action a people takes in international affairs is an announcement of the kind of people they really are. We know -that in-.their daily lives New Zealanders are decent, humane. people. My aim will be to ensure that New Zealand’s actions abroad are in character.

We met on. 5 occasions during his term of office- in Wellington, in Christchurch, in Apia, in Ottawa and. in ‘Canberra. He last visited this country in Npovember to open the chancery of the New Zealand’ High Commission. On each occasion I sensed a deepening and strengthening of the relations between our countries. It meant much to us that Labor Governments in both countries had, signed the Australia-New Zealand Agreement- the A.N.Z.A.C Pact- in 1944. Norman Kirk worked tirelessly to uphold the spirit of that agreement.

From -the beginning of his Prime Ministership the co-operation between us was demonstrated in many; small but significant ways. One of the first decisions of his Government was to provide places for up to 100 Australian students to train in New Zealand as dental therapists. Again, he and his Government agreed readily in January last year’ to make available the services of Mr Justice Woodhouse as head of the Australian Government’s committee of inquiry into a national, compensation and rehabilitation scheme.. .There were frequent and cordial discussions between his ministers and mine.

His early background was one of personal hardship and deprivation. He left school at the age of twelve. He joined the New Zealand Labor Party at the age of twenty and entered Parliament in 1957. From then on his rise was spectacular and confident. He was elected VicePresident of the Labor Party in 1963 and went on to become the youngest elected leader of the party in its history. He won a record majority in his own seat of Sydenham in the elections in 1969. , In 1970 he was elected Chairman of the Asian Bureau of the Socialist International. In 1972 he became Prime Minister and Minister for Foreign Affairs at the age of 49. During all this time. he worked to revitalise and modernise the workings of his party.

He worked tirelessly to improve and develop New Zealand’s welfare state, already one of the most advanced and humane in the world and largely a memorial to his country’s first Labour Government. He was an ardent supporter of peace, an architect of Pacific economic and political co-operation, and a staunch opponent of racialism in any form. All of us who attended the funeral service for him in Wellington were impressed by the manifest grief of the Maori community whom he served and loved. The Maori people, and countless representatives of the South Pacific nations, were present in great numbers in the cathedral and in the streets outside. None of us who heard the. Maori lament at the culmination of the cathedral service will ever forget its haunting beauty and heartfelt intensity.

It is a tribute to the esteem and affection in which he was held by Australians that so many of this country’s leaders attended the funeral service. I was accompanied by the Minister for the Media and the Minister for Repatriation and Compensation and our wives, the Leader of the Opposition, the Chief of the Air. Staff, the President of the Australian Labor Party, in our midst was Dame Annabelle Rankin, who has now come home after her term as High Commissionera term in which she had become a most effective spokesman for Australia, a well-loved figure among the New Zealand public .and a personal confidante of the late Prime Minister.

I have no doubt that Norman Kirk ‘s relentless capacity for work helped shorten his life. He died in the service of his people. He has left the country richer and prouder because of bis leadership. He was a man who believed deeply in the essential goodness of the ordinary man. He was a man whose own goodness and decency were reflected in the quality of his public life, in the greatness of his leadership and in the dedication he showed in all his words and deeds to the welfare of his country and its people.

Mr SNEDDEN:
Leader of the Opposition · Bruce

– Norman Kirk, who was Prime Minister of New Zealand, recently died; hence we have this motion today. It is appropriate that we should move a motion in an understanding of the true depth of the relationship between Australia and New Zealand. I can think of no other 2 countries whose interests are so identified and whose people are so similar. In fact there are many New Zealanders walking about Australian cities and Australians walking about .New Zealand cities who would never be identified as coming from one or other of the countries but who would be identified as coming from either of the countries. There is no capacity to distinguish from any of their characteristics or their way of speaking. Because of that closeness the death of Norman Kirk naturally had an impact on Australians.

Norman Kirk, in a short period, had received a tremendous amount of notoriety for his achievements in New Zealand. He also, of course, became very closely identified with the South Pacific and with South East Asia. He was almost the same physical size as the largest of the South Pacific islanders. He had that strong build which I think made him able to communicate with the islanders as readily as they could with him. They recognised that he did not see a leadership role for New Zealand or for any other country in the South Pacific region; what he saw was a spirit of co-operation between all and that there was no single leader, whether it be a country or person- just a need for co-operation.

He carried that spirit into South East Asia. In South East Asia he was very well respected. He was seen as a leader of a country which wanted to make whatever friendly contribution could be made in co-operation and in no sense intended to intrude New Zealand or its interests into those of the countries of South East Asia with which he was dealing. The same was true, I think, of his relationships with Australia. He recognised them for their intrinsic worth and for their inviolability, and he wanted to make his contribution. He did make a contribution. I hope the contribution he made in all these fields will be well remembered and will never in any way be detracted from.

One particular matter in respect of which a great deal of publicity was given to the efforts of Norman Kirk related to nuclear testing in the Pacific by France. I think it is probably true to say that Norman Kirk was the first who brought this to international prominence, and certainly to prominence in New Zealand, Australia, the Pacific and South East Asia. In many ways he led the protest which was registered with France. I know he would be disappointed, were he still alive, to realise that there were nuclear tests so soon after his death. Fortunately it appears as though that program has now come to an end, and what a relief for the people in this region that it will end. Let us hope that it will never happen again. If it does not happen again, as it ought not to, a very great deal of credit for that must go to the late Norman Kirk.

I met him but a few times. I found him easy to talk to. I found that he was interested not in making political points but in understanding what was in my mind about certain issues. He would express bis view to me quite clearly without any idea of scoring any political points. He was, I think, in every sense of the word, a fine man. He had a fine career. People at my age, or perhaps even older, realise just what a young age it is for a man to die.

It was a personal tragedy for him and a tragedy to the people of New Zealand that not only did he die at a young age but also that he died so soon after coming to office. He was in the full flight of office, so to speak. For his Party leaders who were left, I regret that this should have happened. But, as these things must happen, another man has been elected to lead the Labour Party in New Zealand. Government must go on. I have met but once Mr Rowling, the successor to Mr Kirk. I wish him and his Party good fortune under his leadership.

I wish to express the sympathy of the Liberal Party to the family of Mr Kirk in the loss of their kinsman who had reached such stature, of whom they must have been proud and with whom they hoped for a long association in the years to come.

Mr ANTHONY:
Leader of the Australian Country Party · Richmond

- Mr Speaker, Australians feel a very close kinship with the New Zealand people. On this occasion we too feel the effect of the tragic loss of New Zealand’s relatively new Prime Minister who had made a very great impact in his own country and, indeed, in Australia. He was a man who won this respect by bis sincerity and through the confidence that he was able to engender in people. I had the opportunity to meet him briefly on a number of occasions and I must say that I was impressed by the stature of the man. He was quiet. He was dignified. But he had an enormous grasp of a wide range of subjects. Whilst his educational opportunities might have been rather limited, he did have an intellectual capacity that could match that of the best of educated people.

I think it is very sad when a nation is robbed of a leader particularly if that leader is in the prime of his life and at the point of his political career when he can do so much. Australia and New Zealand are two countries which do need to enjoy close relations and to understand each other. The Right Honourable Norman Kirk did add to this understanding and did help to strengthen the bond and relationship between New Zealand and Australia which I am sure will continue to grow under the new administration. The sympathy of the Country Party is extended to the New Zealand nation and to the Kirk family.

Mr HURFORD:
Adelaide

-Just a year ago I visited New Zealand as a guest of its Government to take part in . the seminar on AustralianNew Zealand relations which was held at the university in Wellington. Not only did I meet Mr Kirk on that occasion at that seminar but I also had the privilege of spending an hour with him on a later occasion in his office. My meeting with the late Prime Minister of New Zealand was an inspiring and stimulating occasion for me. Most vivid in my memory is his outline of his vision for his country. As. has already been said by the Prime Minister and the Leader of the Opposition, Mr Kirk had a special affection for the people of the Pacific Islands. He also had a special feeling for young people, for less privileged people and for the real quality of life of people, excluding things material. I repeat: It was a privilege.for me to meet him. I am glad to have this opportunity to associate myself with this motion of condolence.

Mr ARMITAGE:
Chifley

-I wish to speak briefly on this motion. In 1971 my wife and I went to New Zealand. Typical of the late Norman Kirk,-the New Zealand Prime Minister took a Sunday off to entertain us. Even though I was purely a backbencher, he showed us around his home city of Christchurch. I have never been more impressed in my life by an individual. He was a man who was highly cultured and yet, as the Prime Minister has mentioned, he had very little formal education, leaving school at the age of twelve, By occupation he was a train driver like the late Ben Chifley. Yet, he rose to the highest position in government to which his country could elect any of its citizens.

He was a man, as the Prime Minister also mentioned, who had great concern for people of all races, irrespective of colour, right throughout Asia. His wife- I mention this fact because our condolences go to Mrs Kirk- is a very lovely woman, who was completely dedicated to the work of her husband. She is a person of great humility. I am quite sure she was of very great assistance indeed to her husband in his work. I should like to express very sincere sympathy to her, to the nation of New Zealand, which has lost a very great leader, and, for that matter, to the whole of Asia, for this man understood the great problems of the region and was working towards overcoming, and was doing a great deal to overcome, those problems.

Question resolved in the affirmative, honourable members standing in their places.

Mr SPEAKER:

– I thank honourable members.

DEATH OF MR ft.’ A/ LESLIE

MR SPEAKER:

– I inform,’ the. House of the death on 2 September 197,4; of Mr Hugh Alan Leslie, who was a member of this House for the Division of Moore from 1949 to’ 1958 and from 1961 to 1963. On behalf of the House a message of sympathy will be forwarded, to .the relatives of the deceased. As a mark of respect, to the memory of the late honourable,’ gentleman, I ask honourable members to rise in their places. (Honourable members having risen in thenplaces.) ‘’

Mr SPEAKER:

– I than* ‘honourable members.

page 1239

DEATH OF MR F.C. GREEN- C-B-E., M.C

MR SPEAKER:

– I inform the. -House of the death on 12 September 1 974’. of Mr Frank Clifton Green, C.B.E., M.C., who was Clerk of the House of Representatives from JL.937 to 1955. On behalf of the House a message, of sympathy was forwarded to Mrs Green.

Mr WHITLAM(WerriwaPrime Minister) Mr Speaker, there are very few of us still in the House who served in it at the time Mr Green was Clerk. He became Clerk at a young age and served for what may have been a ‘record term. I had had the good fortune to have ar< family association with him from 1928. He was one of the most vital, colourful people in Canberra in those early days. I am enduringly in his debt.-‘ I went to school with his son; the first words I spoke in this House related to that son’s untimely death. I have maintained contact with Mr and Mrs Green throughout the years of their retirement in Tasmania. He was acknowledged in Tasmania as one of that State’s outstanding citizens in this generation, one of its most effective interpreters of its past. In his service as Clerk, when he had to be anonymous, and in his long, years of retirement, when he was free to write, he was a great protagonist of the privileges of the Parliament and of the duties of parliamentarians, a very great servant of the Parliament and through it of the Australian people. All of us who were members of the House in his time will always remember him.

Mr STREET:
Corangamite

-My association with the late Mr Frank Green does not gb-back for quite so long as does the Prime Minister’s but it extends back to the mid- 1 930s when Mr .Green introduced me, as a very small boy, to the quiet pleasures, the frustrations and the skills of fly fishing in the Molonglo River. I shall always remember him for his many personal kindnesses to me. I express my sorrow and sympathy to his wife and relatives.

Mr SHERRY:
Franklin

-I should like to pay a very short tribute to the late Frank Green. He was a charming and scholarly man and a very distinguished servant of this Parliament, as the Prime Minister has quite rightly pointed out. He was also an outstanding citizen of Tasmania. In addition to all these great qualities he possessed a puckish sense of humour which we all appreciated enormously. I personally am very grateful to him for the many hours of conversation I had with him. His advice to me when I was first elected to this Parliament in 1969 was quite invaluable. He was very closely associated with the village where I now live- Richmond. He understood and, indeed, wrote about its great history and the tremendously important part it played in the development of Tasmania. He lived a very full and active life. He contributed greatly, in my view, to the scholarship of men. On behalf of my wife and myself I extend sincere sympathy to his wonderful widow, Florence.

Mr BEAZLEY:
Minister for Education · Fremantle · ALP

– I should like to pay a brief tribute to Frank Green. When I was first elected to this Parliament in 1945 he was a very kind and valued adviser to me, as a new member, about how to settle into the Parliament. I agree with the honourable member who spoke of his sense of humour. I remember that sometimes he used to depart from this place saying that he was going to look up His Holiness ‘s telephone number, which meant Vat 69, or was going to pay his respects to the British Royal Family, which meant King George IV. He always had those pleasant touches in his conversations with you. His wit in giving advice on political affairs was one of the ways in which it was made palatable. I very greatly valued his professional work as a Clerk of this House. He was a very distinguished Clerk. He will be remembered for his tremendous knowledge of the past of this House and for his kindness to all people.

Mr SPEAKER:

-As a mark of respect to the memory of the late gentleman I invite honourable members to stand in their places. (Honourable members stood in their places)

Mr SPEAKER:

– I thank the House.

page 1239

QUESTION

THE PARLIAMENT

Mr SPEAKER:

– When the House rose on 23 August, the last day on which the House sat, and while I was still in the chair the honourable member for Mackellar (Mr Wentworth), by his continuous shouting, prevented me from formally announcing in the usual manner that the House stood adjourned until the time fixed for its next meeting. The honourable member refused to accede to my request when I called for order. I ask him to apologise for his disorderly conduct and for his disrespect to the Chair.

Mr WENTWORTH:
Mackellar

-Mr Speaker, I thank the House for its indulgence. I regret, as all honourable members must regret, any disorder in this House, or any commotion. Sir, the circumstances were these: The Leader of the House (Mr Daly) had moved-

Mr SPEAKER:

– Order! The facts of what happened are quite clearly elucidated in the Hansard report of 23 August, if anybody would like to read them. I am asking for an apology.

Mr Gorton:

– There is no record of shouting in Hansard.

Mr SPEAKER:

– Order! There is. I have the Hansard in front of me. Anybody who was in the chamber at the time would realise that when the House is being adjourned the Speaker has to announce the next day of sitting and the hour of sitting. By his persistent shouting the honourable gentleman prevented me from doing that, despite the fact that on 3 occasions I asked him to resume his seat. I was forced to leave the chair without making that announcement. Without debating the matter any further, I ask the honourable gentleman to apologise to the Chair.

Mr Wentworth:

- Mr Speaker, your rulings were wrong, and I am entitled to -

Mr SPEAKER:

– Order! I ask the honourable gentleman for the final time to apologise. If he does not I will name him.

Mr Wentworth:

-Sir I am -

Mr Nixon:

– I rise on a point of order, Mr Speaker, With great respect, Sir, I have read page 1 168 of Hansard.

Mr James:

– He has finally read it.

Mr Nixon:

– If the honourable member would not mind allowing me to continue I would thank him very much. I have read the Hansard record and there is no mention of shouting, nor do you draw attention to the pandemonium or say that the honourable member ought to stop shouting. The point I make is that there is no way in the world that anybody reading the Hansard record could assume that the position you put is accurate. Therefore I think the honourable member for Mackellar ought to be given some chance to explain.

Mr Killen:

– I rise to speak on the point of order. When on 23 August the honourable member for Mackellar rose to his feet after you had said: ‘The question is that the House do now adjourn’ and before that question was put, you were still in command of the House, Mr Speaker, and any disorderly conduct on the part of the honourable member for Mackellar should have been dealt with at that time. The House had not at that point of time adjourned. The House was still in session. The powers of the Speaker were still there to be used. The fact that you failed to use them does not justify your action on this occasion.

Mr SPEAKER:

– I do not think the honourable gentleman was in the House at the time. Any honourable member who was in the House would know that the honourable member for Mackellar showed a disrespect for the Chair. He even denied me the opportunity of announcing the next day of sitting or the hour at which the House would meet. He was shouting at the top of his voice. I asked him on several occasions- on 3 occasions to be exact- to resume his seat and he would not do so. I call upon him for the final time to apologise. If he does apologise to the Chair the matter will finish there.

Mr Wentworth:

– Thank you, Mr Speaker. You have made certain accusations against me. I am entitled in all fairness to reply to them, and I will do so very briefly. I say that your conduct in the chair was wrong. You acted in violation of Standing Orders, and I am prepared to prove it

Mr SPEAKER:

– I name the honourable member for Mackellar.

Mr DALY:
Leader of the House · Grayndler · ALP

– As you have given the honourable member for Mackellar many opportunities to apologise, Mr Speaker, it is not much good asking him to do it now. So I formally move:

That the honourable member for Mackellar be suspended from the service of the House.

Question put-

That the honourable member for Mackellar be suspended from the service of the House.

The House divided. (Mr Speaker-Hon. J. F. Cope)

AYES: 64

NOES: 54

Majority……. 10

AYES

NOES

In Division:

Question so resolved in the affirmative.

Mr SPEAKER:

– The honourable member for Mackellar is therefore suspended from the service of the House for 24 hours.

Mr Wentworth:

- Mr Speaker, I have sufficient respect for the Standing Orders to leave, even though other people do not have respect for the Standing Orders. (The honourable member for Mackellar thereupon withdrew from the chamber.)

Mr SPEAKER:

– Are there any petitions?

Mr Nixon:

– I raise a point of order, Mr Speaker. My point of order is based on the fact that in Hansard of 23 August you are reported as stating clearly and specifically:

Order! I have not put the question. The question is that the House do now adjourn. Those of that opinion say ‘aye’, to the contrary ‘no’.I think the ayes have it.

From that I conclude that the adjournment was taken on the voices. It is from that point on that Hansard records that a dispute took place between yourself and the honourable member for Mackellar. I ask: Are you now ruling that you can suspend an honourable member in this session because of a discussion that took place after the previous session of the House had been adjourned?

Mr SPEAKER:

-Certainly, I am ruling that way.

Mr Nixon:

– You are so ruling?

MrSPEAKER-Yes.

Mr Nixon:

– Then I move dissent from that ruling.

Mr SPEAKER:

– I would like to remind the honourable member for Gippsland that the Speaker is in charge of the House until such time as he leaves the chair. Honourable members might recall that my predecessor was very strict about ensuring when the adjournment took place each night that no honourable member left his place until such time as Mr Speaker had left the chair. He was very strict about that and the honourable member would know that. While the Speaker occupies the chair he has full authority in the House. Until such time as I leave the chair I have full authority over the proceedings of the House.

page 1241

QUESTION

OBJECTION TO RULING

Mr NIXON:
Gippsland

– I formally move:

That the ruling be dissented from.

Mr Young:

– I rise to a point of order, Mr Speaker.

Opposition members- The new boy.

Mr Young:

– Members of the Australian Country Party have just woken up. The honourable member for Gippsland is not taking a point of order; he is moving dissent from your ruling, Mr Speaker.

Mr NIXON:

-I have moved dissent from Mr Speaker’s ruling, so sit down.

Mr SPEAKER:

-Order! A point of order can be taken at any time. I call the honourable member for Port Adelaide.

Mr Young:

– My point of order is that the Standing Orders provide that the objection to your ruling must be taken at once. It was not taken at once, so I suggest that the motion is out of order.

Mr NIXON:

– I wish to speak to the point of order, Sir.

Mr SPEAKER:

-Order! The ruling has just been given, so it is in order to move a motion of dissent from the ruling.

Mr NIXON:

-I submit that if the House was in session and the Chair was in control at the time, if you had an altercation or disputation with the honourable member for Mackellar (Mr Wentworth) it would have been quite proper for you to seek -

Mr SPEAKER:
Mr Martin:

– I rise to order. Mr Speaker, the point of order is that the honourable member for Gippsland, I submit, is out of order as you had already called for petitions.

Mr SPEAKER:

– The honourable member for Gippsland is entitled to move the motion of dissent.

Mr NIXON:

-Mr Speaker, I have moved dissent from your ruling because you have made it plain that the Speaker is in charge of the House right up to the point when he leaves the chair. If you had a dispute or an altercation with the honourable member for Mackellar as you statethere were only 3 exchanges from that point on- you should have taken action at that time. I believe it is quite improper that a member can have hanging over his head a charge that may be laid by a Speaker months and months after the event in question has occurred. The facts show that you put the question for the adjournment of the House and you said: ‘The ayes have it’. You sat in the chair then still calling the honourable member for Mackellar to order. Why did you not at that point of time -

Mr SPEAKER:

-The honourable member is incorrect I did not sit in the chair; I stood up to make the announcement about the next day of sitting.

Mr NIXON:

– Let us be precise about it. You stood up to make some announcement. In my view, if you were disturbed about the performance of the honourable member for Mackellar you should have named him and called for a division and had him suspended from the service of the House at that time. You did not do so. I do not believe it is proper for you now, five or six weeks later, just because you now have the numbers, to suspend him. The simple truth is that on that day you were not sure you had the numbers because everybody had cleared off.

We all remember the circumstances of that particular sitting. The Minister for Transport had caused a dispute with the airline pilots and they had gone out on strike and refused to carry the Labor politicians. As a result of that, VIP aircraft were called into service, honourable members opposite were busy hurrying and scurrying to get on to the VIP aircraft to get home, and you were not sure that you could suspend the honourable member for Mackellar from the service of this House. I submit that it is quite improper that a charge of this nature can be levied five or six weeks after the event.

Dr Gun:

– I raise a point of order, Mr Speaker.

Mr Peacock:

– Why does he not stand up?

Mr SPEAKER:

-The honourable gentleman is standing up.

Dr Gun:

- Mr Speaker, the only point that you have ruled on is whether you were in control of the House when you stood up. The matters that the honourable member for Gippsland is now raising relate to a period of time that has elapsed and have nothing to do with any point on which you have ruled. Therefore, he should speak only about the matter from which he dissents. The motion moved by the honourable member for Gippsland relates to dissent from your ruling. You did not rule at all on the points that he is now debating.

Mr SPEAKER:

– Yes, the point of the motion of dissent is whether I was correct at the time in leaving the chair and in asking for an apology on the day on which the Parliament resumed. I was denied an opportunity to do so on the day on which the event occurred.

Mr NIXON:

-I submit that you had the capacity on that day as the Speaker of this House- indeed it was your proper function and duty on that occasion to do so if you felt so inclined- to suspend the honourable member for Mackellar. I submit on the first count that the charge you lay against him is not worthy when compared with precedents established in relation to disturbances in this House. I recall to your mind the day when the Minister for the Capital Territory (Mr Bryant) stood in this place and refused to accede to the Speaker’s wish. At that time there was provocation for the Speaker to rule against him.

Mr Bryant:

– I rise on a point of order, Mr Speaker.

Mr SPEAKER:

-Order! The point is quite clear. The matter before the Chair is a motion of dissent from the ruling of the Chair in relation to the honourable member for Mackellar. The matter that the honourable member for Gippsland refers to and which occurred in the past was not condoned or encouraged by me; so he should not regard it as a precedent for a ruling I have given in this case. It is for the Chair to decide what is right and proper. I thought I had done the right thing in letting it go until this time, because the honourable member denied me the opportunity of saying anything at all. If the honourable member had been in the Chair- I leave it to the sense of fairness of any member who was in the House at the time- he would have taken exactly the course that I took.

Mr NIXON:

– Are you suggesting that I was not in the House?

Mr SPEAKER:

– Well, if you were in the House I think that you would agree.

Mr NIXON:

– I recall the circumstances very vividly, sir, as I recall all of the proceedings of that afternoon. The simple fact is mat you had an opportunity to discharge your duties as Speaker, and that is when you should have discharged them. There is a precedent -

Mr Bryant:

– I rise on a point of order. I understand that the motion we are now debating is that your ruling that you are in charge of the House until you actually leave the Chair be disagreed with. The only point to which the honourable member for Gippsland -

Mr NIXON:

-That is not the motion at all. Get it right for once. Read tomorrow’s Hansard and catch up.

Mr Bryant:

– A moment ago I asked the Clerk what was the motion and that was the information that I was given and it is the question to which the honourable member for Gippsland must address himself. If he confines himself to that motion, or whatever the motion was, he will be inside the Standing Orders, perhaps. But he is just pursuing a course of constructive sabotage of the proceedings of this House and he ought to be thrown out himself.

Mr NIXON:

– A turtle farmer speaks; that is about how much he knows about it. He does not even know to what point of order he is addressing himself. All he is doing is wasting the time of this House. I believe that we are faced with a precedent. Mr Speaker, I would like to know on what precedent you have based this action because I think that it is important that we have this information. What you are doing today is laying down a ground rule that when any member misbehaves, even though the Speaker may not take action at the time he can on reflection or after a certain amount of publicity has been given to the event, perhaps a few months later proceed to take action against the member concerned. I submit that you were derelict in your duty on 23 August. If you thought that the honourable member for Mackellar should be suspended from the service of the House you should have taken action at that time. It is quite improper that any Speaker should come into this Parliament five or six weeks later, or whatever the period is, and then so move. It is for that reason that I have moved dissent from your ruling, Sir.

I repeat the point that I have made because each member of this Parliament will be affected by it. The ruling which you have given means that any Speaker can ignore something if it so suits him by leaving the chair. He can then come into the House the next day, the next week, the next month or even 6 months later, and at an appropriate time, perhaps when a member is about to speak on a vital and important matter, take action that results in the suspension of that member from the service of the House. I believe that the action you have taken is a dereliction of your duty as Speaker. Whilst I have not always been in your best graces as a member of this House I respect the forms of the House and the Chair for the job which it must do. I will fight and support you, Sir, when you have a job to do. But I will not support a resolution of this nature which gives you the power to remove a member from this House perhaps months after the event has occurred. This is exactly what the precedent lays down. If you wanted to remove the honourable member for Mackellar on 23 August it was your bounden duty to do so at that time and not to come back to this House 5 weeks later and do it then. It is for that reason that I have moved against your ruling.

Mr SPEAKER:

-Is the motion seconded?

Mr GARLAND:
Curtin

-The Opposition wishes to dissent now from your ruling, Mr

Speaker, because it believes that it is an incorrect one. As you would be aware, Mr Speaker, we have disagreed with your rulings on other matters. We do not believe that we can let this matter go by without making our full protest.

Mr Beazley:

-I take a point of order. I think the House is entitled to know the form of dissent moved in writing, as it is supposed to be, and the ruling that is being dissented from. I think we are being treated to an exercise in obstruction. I do not believe that the seconder of the motion even knows what it is.

Mr SPEAKER:

-As I see it, the motion of dissent is on the question whether the Speaker has power, after the House has adjourned and when he is forced to leave the Chair without being given the right to make an announcement as to the next day of sitting, to take action on a later day of sitting in regard to disrespect shown to the Chair.

Mr Collard:

– I take a point of order. My point of order is that this motion was not put in writing and was not seconded before the honourable member for Gippsland debated the question. Therefore it should be ruled out of order.

Mr SPEAKER:

-It was in writing and it was in the hands of the Clerk.

Mr GARLAND:

-The Minister for Education speaks about obstruction. I point out to the House that he did not let me get into the third sentence of my remarks and explain the position as the Opposition sees it. I pointed out to you, Mr Speaker, that what is in dispute here is whether you have the right to demand an apology from a member after the one day sitting that was held in this House on 23 August when certain events took place at the conclusion of the proceedings. Some of those events are set out on pages 1 1 67 and 1168 of Hansard. Other events took place afterwards and are not recorded. You have ruled, Mr Speaker -

Mr Scholes:

– On a point of order -

Mr GARLAND:

– The Government cannot take it.

Mr Scholes:

– I cannot take idiots. Mr Speaker, in specific words your ruling was that you were in charge of the House until such time as you left the chair. The matter at present under debate was resolved by a resolution which was carried by this House some half an hour ago. The only question which can be subjected to your ruling is whether you are in fact in charge of this House until you leave the chair. I suggest that honourable members ought to be justifying a dissent motion on the basis that you are not in charge of the House while you are hi the chair, because that is what they are saying.

Mr SPEAKER:

– I ask the honourable member for Curtin to keep to the motion of dissent.

Mr GARLAND That is exactly what I intend to do, Mr Speaker. I refer to standing order 304 which perhaps the honourable member may care to read. Under the heading ‘Disorder’ standing order 304 states:

If the offence has been committed in the House, the Speaker shall forthwith put the question. . .

That is the whole point at issue. Mr Speaker, you were in charge of the House- of course everybody agrees about that- at the time you were occupying the chair. On the last day of sitting you were in the chair but you did not force the issue, call for an apology and go through the motions that you have gone through this afternoon. You waited all these weeks and you have now brought the matter to a head. Mr Speaker, that is the ruling you have made and that is what happened. What the Opposition is dissenting from is the ruling which you gave and which was incorporated in Hansard in response to the request by the honourable member for Gippsland.

Mr Scholes:

– I take the point of order again. Mr Speaker, you were asked specifically by the honourable member for Gippsland whether you were ruling that you were in charge of the House after the motion for the adjournment of the House had been carried. Your ruling specifically was that you were in charge of the House until you left the chair. The honourable member has just said that he does not question that, but he wishes to dissent on another question.

Mr GARLAND:

– If the honourable member cannot follow the debate I am afraid there is nothing further I can do to elucidate it for him. We are protesting about your conduct, Mr Speaker, and I think it is right to refer to the protests that have been made to earlier rulings. I make the point that we are opposing your ruling today because of the context in which it falls in your conduct of the House. I remind the House that the Government, which has undoubted rights and obligations to govern, nevertheless through its election of a Speaker and the conduct of affairs here has the obligation to allow Opposition members to speak and to ensure that rulings are fair and that the House is equitably run. The honourable member for Mackellar did his best all through that day to raise serious matters. You will be aware, Mr Speaker, that the Government has since appointed a royal commission to deal with one of those matters. The honourable member was prevented from speaking, so naturally he became upset towards the end of that day.

Mr Young:

– On a point of order, Mr Speaker. My point of order is that the detail that has been put into the debate by speakers from the Opposition has led to a great deal of confusion in the House. May I suggest that the dissent motion be read to the House so that we know exactly on what we are taking the points of order?

Mr SPEAKER:

– I should like to make perfectly clear once and for all exactly what happened on that particular occasion. I have done this already and I will emphasise it again. Everybody who was in the House will recognise that what I am saying is factual. I intended to announce the next day of sitting. I stood in my place, as I am doing now, and appealed to the honourable member for Mackellar on 3 occasions.

Mr Nixon:

– Why did you not name him?

Mr SPEAKER:

-Order! The honourable member will cease interjecting while I am addressing the chamber.

Mr Nixon:

– Answer the question.

Mr SPEAKER:

-Order! The honourable member will cease interjecting. On 3 occasions I appealed to the honourable member for Mackellar to be seated to enable me to announce the next day of sitting. By shouting and making his own prepared speech to the gallery, as he said he would, he declined to give me the opportunity of announcing the next day of sitting. As a result of that I would have been here for half an hour before I could make the announcement. Instead of that I had to leave the chair. I was forced to leave the chair because he denied me the right -

Opposition members- Oh!

Mr SPEAKER:

– Anybody who was in the House would know that what I have said is right. Even the honourable gentlemen on the Opposition front bench will agree that what I am saying is quite correct. The honourable member denied me the opportunity to make an announcement. That is why I had to leave the chair at the time. That is quite clear.

Mr Malcolm Fraser:

– May I speak to the point of order?

Mr GARLAND:

– I have only a certain amount of time.

Mr SPEAKER:

-Order! The honourable member for Curtin has the floor. The honourable member can take a point of order on the speech of the honourable member for Curtin if he wishes.

Mr GARLAND:

– I have only a limited time, as honourable members know. These interventions and points of order are very interesting, but I should like to make one or two points. I point out that the matter before the House is your ruling, Mr Speaker, on the request for an apology. I point out too that there were some mitigating circumstances. I refer you to an item on page 1 167 of Hansard. At one stage the Leader of the House (Mr Daly) moved that the question be now put. Sir, you said:

I promised to deal with a personal explanation pertaining to matters outside this House.

You declined to take that motion -

Mr SPEAKER:

-Order! Let me clear up that matter.

Mr GARLAND:

– It is not fair to intervene; let me finish.

Mr SPEAKER:

-Order! The honourable member will resume bis seat.

Mr GARLAND:

-You must be fair, Mr Speaker.

Mr SPEAKER:

-I am trying to be fair as I was with the honourable member for Mackellar previously. The honourable member had come to see me earlier and said that he would like to make a personal explanation because of something that had been said by an announcer on the radio. I did not tell the Leader of the House that a personal explanation was to be made and he moved the adjournment. In fairness to the honourable member for Mackellar I appealed to the Leader of the House that there was a personal explanation to be made. I intended to call the honourable member for Mackellar to do so before the adjournment of the House was moved.

Mr GARLAND T agree with that and I accept that that was the position exactly. I was in the House and I was aware of that situation. I was saying, Mr Speaker, that this discussion is about whether the procedures of this House are being correctly carried out in relation to the ruling that was made. I am pointing out the mitigating circumstance which applies to the honourable member for Mackellar. Having declined to take that motion, which was the gag, several minutes of debate or cut and thrust took place and then you said:

The question is that the House do now adjourn.

That motion had been declined. The honourable member for Mackellar intervened on other matters, and then later you said:

Order! I have not put the question.

Then, Mr Speaker, you said :

The question is that the House do now adjourn.

The relevance of these extracts is that it shows that the situation was a highly confused one. The honourable member for Mackellar, believing that he had the right and duty to raise the 2 matters to which I have alluded already, did so. You left the chair.

Our major point is that, if you wished to take action against the honourable member for Mackellar in the way in which you have this afternoon, it should have been done on that occasion and at no other time. You have said yourself that you were in charge of the House. You were in the chair. You were responsible for the conduct of the House. That is not in dispute. What is in dispute is your action this afternoon in raising the matter in these confused circumstances. I point out that you asked the honourable member for Mackellar to apologise for what happened when he was endeavouring to raise those matters. Naturally he felt very deeply about them particularly as he had in his hand at the time documents which indicated some corruption in the community. The Government has appointed a royal commission to look into one of those matters. It cannot be said to be a matter of no substance. In those circumstances, for you, in the name of the House, to ask the honourable member, as you did this afternoon, to apologise to you, is we believe incorrect. I suggest to you that it is not right and it is not fair.

I conclude on the point that the essence of democracy is divided power and the essence of parliamentary proceedings in this House is fairness. Democracy includes the opportunity for minorities to have their voices heard. The Opposition has the right to be reasonably heard and to have standing orders upheld. This right is being stifled by your decision this afternoon and by your conduct on previous occasions.

Mr LIONEL BOWEN:
Special Minister of State · KingsfordSmithSpecial Minister of State · ALP

- Mr Speaker, in the absence of the Leader of the House (Mr Daly), who has been called away on a matter of personal urgency, I say on behalf of the Government that we oppose the motion. The position is made quite clear by reference to page 1 163 of Hansard where you will see that the motion for the adjournment of the House was carried by 56 votes to 45 votes. You, Mr Speaker, were prevented from announcing the date for the resumption of the Parliament. The matter is as simple as that. The conduct of the honourable member for Mackellar (Mr Wentworth) prevented you fronmaking a formal announcement as to when the, House would next sit. It was that conduct that was irregular and prevented the Speaker from carrying out his normal duties.

Accordingly, I say that today a great deal of time has been wasted on an issue that could have been dealt with outside this Parliament. There are many important issues to be debated here. One would have thought that honourable members opposite would have been considering matters that affect their electorates and may have been anxious to pursue the business of the Parliament and not try to continue to support the sort of conduct that brings this Parliament into disrepute. While ever honourable members opposite seek to associate , themselves with conduct of that type they will lower the dignity of this Parliament. A lot of time has been wasted today. All that was asked for was an apology which any reasonable person would have expected to obtain. That apology was refused again today. We say no more about it. I move:

Mr SPEAKER:

-Order! The question is that the question be now put.

Mr Gorton:

– There has been a misrepresentation by the Minister who claimed that the question was passed when it was never put or passed.

Mr SPEAKER:

-Order! There is a motion before the Chair.

Mr Lionel Bowen:

– It is in Hansard. It was put.

Mr Gorton:

– Look over a further 3 pages.

Mr SPEAKER:

-Order! There is a motion before the Chair which cannot be debated.

Question put-

The House divided. (Mr Speaker- Hon. J. F. Cope)

AYES: 62

NOES: 53

Majority……. 9

AYES

NOES

Question so resolved in the affirmative.

Mr Gorton- Mr Speaker -

Mr SPEAKER:

-Order! I ask the right honourable member to wait until the subsequent question is put.

Mr Gorton:

– I think the matter ought to be raised now.

Mr SPEAKER:

-Very well. I will hear the right honourable member for Higgins.

Mr Gorton:

– I feel the point that I wish to make should be made now before the Opposition votes on false information.

Mr SPEAKER:

-Order! Actually the debate is closed as a result of the motion just carried. If the right honourable gentleman waits until after the next division I will give him the indulgence of the Chair to explain the matter.

Mr Gorton:

– You will not give it now?

Mr SPEAKER:

– No.

Original question (Mr Nixon’s motion) put-

That the ruling be dissented from.

The House divided. (Mr Speaker- Hon. J. F. Cope)

AYES: 54

NOES: 63

Majority……. 9

AYES

NOES

Question so resolvedin the negative.

Mr GORTON:
Higgins

-I desire to take this opportunity, it being the first that has presented itself to me, to indicate that the Special Minister of State (Mr Lionel Bowen) made a misstatement to this House and misled it for the purpose of the last division. He said that the motion for the adjournment was put and was carried by so many votes to so many other votes. The Hansard record, a copy of which I have in my hand, shows clearly at page 1 167 that Mr Daly said: ‘I move: “That the question be now put.” ‘ You, Mr Speaker, as I think you said during the course of the debate, said: ‘I promised to deal with a personal explanation pertaining to matters outside this House’. The honourable member for Mackellar then rose, in pursuance of that arrangement with you, and dealt with that matter. There is no question that the statement made in this House by the Special Minister of State was completely and entirely wrong, and since it will appear in Hansard I believe I should make this explanation.

page 1248

PETITIONS

The Clerk:

– Petitions have been lodged for presentation as follows and copies will be referred to the appropriate Ministers:

Child Endowment

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled.

The humble Petition of the undersigned citizens of Australia respectfully showeth that:

Child Endowment received by families has declined relative to average earnings so that today it is about 20 per cent of its value in 1949.

The Interim Report of the Australian Government’s Commission into Poverty recommended a substantial increase in Child Endowment as a way of alleviating poverty.

This report pointed out that increased Child Endowment deserved priority and would be advantageous to the community in the long run.

It specifically recommended increasing child endowment from50 cents to $ 1 . 50 for the first child; from $ 1 . 00 to $2.00 for the second child; from $2.00 to $4.00 for the third child; from $2.25 to $7.00 for the fourth child; and to $8.00 for subsequent children.

Your petitioners humbly request that the Government increase Child Endowment in the September Budget.

And your petitioners as in duty bound will ever pray. by Mr Crean, Mr Bryant, Mr Anthony, Mr Bourchier, Mr Clayton, Mr Kerin, Mr Lamb, Mr Lloyd, Mr McKenzie, Mr Oldmeadow, Mr Peacock, Mr Riordan, Mr Staley, Mr Street and Mr Willis.

Petitions received.

Aid for Sahelian Region of Africa

To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:

That up to ten million people are said by the UN Secretary-General, Mr Kurt Waldheim, to face death by starvation in the Sahelian region of Africa and that as a result of this drought, many nomads are being forced to give up their traditional way oflife, and

That the resources of the governments of this region are inadequate to cope with either the immediate or long-term needs of these people.

We your petitioners therefore humbly pray that the House urge that the Australian Government grant both immediate emergency aid to a value of at least ten million dollars and continue to assist in the long-term agricultural and social development of this region.

And that it take a leading part in initiatives to set up a World Food Fund and World Fertilizer Fund at the World Food Conference this November. by Mr Connor, Dr Everingham, Mr Coates, Mr King, Mr Lamb, Mr Peacock and Mr Street.

Petitions received.

Social Services

To the Honourable Speaker and members of the House of Representatives in Parliament assembled the petition of the undersigned citizens of Australia respectfully showeth:

That inflation which now besets so many countries today and in Australia is now at the rate of 14.4 per cent per annum is most seriously affecting and making life intolerable for those least able to take corrective action to maintain their position, namely, pensioners and those now retired living on fixed incomes.

Whilst the Australian Government is giving effect to its election policy of making $1.50 per week pension increases each Autumn and Spring such actions have been completely nullified by the stated rate of inflation.

This fact of life impels your petitioners to call on the Australian Government as a matter of urgency to-

Make a cash loading of $5 per week to those pensioners who have little means other than the present inadequate pension eroded by inflation.

That each Autumn and Spring the increase in social security pension payments be not less than $3 per week to ensure that within a reasonable period the Government’s policy pledge to affix all pensions at 25 per cent of the average weekly earnings be achieved.

In order that money may go to areas of greater need the tapered means test ceilings of income and assets be frozen.

To allay the concern of social security recipients as to their future when in 1975 the means test has been abolished and replaced by a National Superannuation Act that there be an assurance by the Australian Government that the said Act will provide a guaranteed minimum income to social security recipients based on the policy of the Australian Commonwealth Pensioners’ Federation and that of the Australian Council of Trade Unions, namely, the payment of 30 per cent of average weekly earnings adjusted from time to time in accordance with figures issued by the Commonwealth Statistician and published quarterly. by Mr Armitage, Mr Martin, Mr Mulder and Mr Reynolds.

Petitions received.

Palace Hotel, Perth

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled.

We the undersigned citizens of Australia do humbly petition the Parliament of the Commonwealth of Australia that it might take such steps as may be necessary either to direct the Commonwealth Banking Corporation to preserve and restore The Palace Hotel or itself acquire the said Palace Hotel, St George’s Terrace, Perth, on its present site so as to preserve and restore it in perpetuity.

Further we do humbly petition this honourable Parliament to make such funds as may be necessary available to purchase the entire contents of the said Hotel from the owners thereof.

And your petitioners as in duty bound will ever pray. by Mr Bennett, Mr Bungey and Mr Collard.

Petitions received.

Television: Pornographic Material

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled.

The humble petition of the undersigned citizens of Australia respectfully showeth:

That we strongly oppose the easing of restrictions on the importation, production in Australia, sale or distribution of pornographic material whether in films, printed matter or any other format.

That any alterations to the Television Programme Standards of the Austalian Broadcasting Control Board which permits the exploitation of sex or violence is unacceptable to us.

Your petitioners therefore humbly pray that the Government will take no measures to interfere with the existing Television Programme standards or to permit easier entry into Australia, or production in Australia, of pornographic material.

And your petitioners, as in duty bound, will ever pray. by Mr Bourchier, Mr Hodges and Mr Luchetti.

Petitions received.

Education

To the Honourable the Speaker and members of the House of Representatives in Parliament assembled.

The petition of the undersigned citizens of Australia respectfully showeth:

  1. Your petitioners believe in the principle that every Australian child, irrespective of the school he attends, is entitled to economic support for his basic educational needs from the funds placed at the disposal of the Australian Government through taxation. Further, they believe that this economic support should be in the form of per pupil grants which are directly related to the cost of educating an Australian child in a government school.
  2. Your petitioners believe that in addition to this basic per pupil grant additional assistance should be provided in cases of educational disadvantage, but they believe that the appropriate instruments for reducing economic inequalities are taxation and social welfare systems which deal with individuals and families and not with schools.

Your petitioners therefore humbly pray that, as an interim measure, the Government will immediately increase the current grants being made to children in non-government schools to at least 50 per cent of the cost of educating children in government schools, thus enabling the nongovernment schools to continue to exist and fulfil their function of educating Australian children.

And your petitioners as in duty bound will ever pray. by Mr King, Mr Lloyd and Mr Staley.

Petitions received.

Australian Capital Territory: Self Government

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble Petition of the undersigned residents of the Australian Capital Territory respectfully showeth-

  1. 1 ) That Australian citizens are already governed to an excessive extent, and to introduce machinery to provide self-government for the Australian Capital Territory would exacerbate this situation.
  2. That the cost of providing self-government for the Australian Capital Territory will have to be borne by residents of the Australian Capital Territory, and that self-government should not be instituted without consulting by means of a referendum those who will have to bear the cost.
  3. That any provision of self-government would be meaningless unless it received popular support from the residents of the Australian Capital Territory, and the measure of the extent of this popular support could be best obtained by means of a referendum.

Your Petitioners therefore humbly pray that the House urge the Government not to proceed with the introduction of self-government for the Australian Capital Territory until the residents of the Australian Capital Territory are consulted, by means of a referendum, on the issue.

And your Petitioners, as in duty bound, will ever pray. by Mr Enderby and Mr Hunt.

Petitions received.

National Health Scheme

To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble Petition of undersigned citizens of Australia respectfully showeth-

That the proposed ‘free’ national health scheme is not free at all and will cost four out of five Australians more than the present scheme.

That the proposed scheme is discriminatory and a further erosion of the civil liberties of Australian citizens, particularly working wives and single persons.

That the proposed scheme is in fact a plan for nationalised medicine which will lead to gross waste and inefficiencies in medical services and will ultimately remove an individual’s right to choose his/her own doctor.

Your petitioners therefore humble pray that the Government will take no measures to interfere with the basic principles of the existing health scheme which functions efficiently and economically.

And your petitioners, as in duty bound, will ever pray. by Mr Adermann and Mr McLeay.

Petitions received.

Australian Economy

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble Petition of undersigned citizens of Australia respectfully showeth-

That we Petition the Australian Government to stop this unrealistic attitude towards inflation, its irresponsible attitude towards the economic welfare of the people of Australia and to especially consider the plight of the housewives, our elderly citizens and the worker.

Your Petitioners therefore humbly pray that immediate action be taken to control inflation, curb striking unions and bring about strong leadership and Government

And your Petitioners, as in duty bound, will ever pray. byMrEnderby.

Petition received.

Baltic States

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of the Commonwealth respectfully showeth:

Whilst the Australian Government is granting freedom and independence to Papua and New Guinea, the once free Baltic States of Estonia, Latvia and Lithuania are occupied by the Soviet Union and their citizens are continuously and brutally deprived of personal, civil and religious freedoms. We humbly beg to draw the attention of the House of Representatives to this fact and ask that the matter be raised in the United Nations by the Australian Government. The annexation and incorporation of the Baltic States by the Soviet Union has not been recognised by any Western democracy, including Australia. We beg the House of Representatives to continue such non-recognition and to disallow any steps by Australian Government which would amount to recognition of aggression.

And your petitioners, as in duty bound, will ever pray. byMrSnedden.

Petition received.

Milk for School Children

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled:

The humble Petition of the undersigned members of the Ladies’ Auxiliary and Mothers’Club of Lismore Demonstration School, New South Wales respectfully showeth that the free daily issue of milk to school children at the Lismore Demonstration School has been withdrawn.

Your Petitioners therefore humbly pray that the House urge the Government to reverse the decision which has led to the withdrawal of free daily milk for school children.

And your Petitioners, as induty bound, will ever pray. by Mr Anthony.

Petition received.

Post Office at Maldon, Victoria

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble Petition of the undersigned residents of the Shire of Maldon, Victoria, respectfully showeth-

That the closure or down-grading of the post office at Maldon, Victoria, will notbe in the best interests of the residents ofthe area in that:

  1. Many of the elderly citizens now have their mail delivered by post office staff.
  2. The present service would not be available for an expected increased population and for those who are involved in development of the area.

Your Petitioners therefore humbly pray that the House urge the Government not to close or down-grade the post office at Maldon, Victoria.

And your Petitioners, as in duty bound, will ever pray. byMrBourchier.

Petition received.

Industrial Solar Energy

To the Honourable the Speaker and Members of the House of Representatives in Parliament Assembled. The humble Petition of the undersigned citizens of Australia respectfully showeth:

That the world’s supply of fossil fuel is limited, and that research into alternative sources of energy is urgent.

That nuclear energy is a source of dangerous pollution, and contains inherent threats to the very existence of mankind.

That solar energy is increasingly acknowledged as a possible alternative, and deserves the type of research for which Australia’s size and climate is particularly suited.

That the problems of harnessing solar energy could well be solved if efforts comparable with our atomic energy research were applied to it.

Your Petitioners therefore humbly pray that the Government will reduce its current spending on atomic energy research, and urgently set aside sufficient funds for meaningful research into industrial solar energy, and take whatever steps may be necessary to see that this research is begun with the shortest possible delay. by Mr Coates.

Petition received.

Pornographic Literature and Films

To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble petition of undersigned citizens of Australia respectfully showeth:

That the undersigned persons believe that some literature and films being published and shown throughout Australia are detrimental to the wellbeing of the Community.

Your Petitioners thereby humbly pray that the Government will take steps to see that the publication and availability of pornographic and other material of that nature is restricted and that the people are made aware of the dangers to the Community from such literature and films.

And your Petitioners, as in duty bound, will ever pray. by Mr Garland.

Petition received

Marriage

To the Honourable the Speaker and Members of the House of Representatives in Parliament Assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:

  1. That the whole principle of the Family Law Bill 1974 is aimed at destroying the entire concept of marriage as traditionally recognized in Australia, with its special obligations between husband and wife and between parents and children.
  2. That the bill fails to recognise or provide for the equal rights and responsibilities of both parties to a marriage, such as are provided for in the Universal Declaration of Human Rights, including the rights of parents to choose the type of education they desire for their children.
  3. That this bill appears to express the desires of only a minority of Australians.

Your petitioners therefore humbly pray that the House of Representatives in Parliament assembled should not admit into the law of this land the principle that marriage is only temporary and the family no longer the fundamental unit of society.

And your petitioners, as in duty bound, will ever pray. by Mr Hodges.

Petition received.

Human Rights Bill

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth that the Human Rights Bill

  1. Insofar as it attempts to legislate regarding the exercise of religion and religious observances, is in contravention of Section 116 of the Constitution of the Commonwealth of Australia,

  2. Will tend to deprive free Australian citizens of religious liberty and freedom of worship, and parents and guardians of the right to choose the moral and religious education of their children in that:

    1. The Government could introduce regulations as to the time, place and manner in which people may manifest their religion and beliefs.
    2. The Bill excludes the recognition of the family as the natural and fundamental group unit of society, and its right to protection by society and the State,
    3. The Bill does not explicitly recognise the liberty of parents, and when applicable, legal guardians, to ensure the religious and moral education of their children.

Your petitioners therefore humbly pray that the House not proceed with the Human Rights Bill.

And your petitioners, as in duty bound, will ever pray. by Mr Hodges.

Petition received.

Australian Wool Corporation: Report

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:

That the implementation of the recommendations of the Report of the Australian Wool Corporation will be detrimental to the interests of the woolgrowing industry in Australia;

That the recommendations of the Report of the Australian Wool Corporation do not permit Australian woolgrowers the freedom to select the methods by which they sell their clip; and

That the cost of the operation of the scheme proposed by the Australian Wool Corporation will be burdensome and outweigh any financial advantages to woolgrowers.

Your petitioners therefore humbly pray that the House take steps to ensure that the Government rejects the recommendations.

And your petitioners, as in duty bound, will ever pray. by Mr Hunt.

Petition received.

Baltic States

To the Honourable the Speaker and members of the House of Representatives in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:

Whilst all colonial powers except the Soviet Union have granted independence and self-determination to all their colonies and dominions, and whilst Australia is in the process of granting independence to Papua and New Guinea, and whilst all previous Australian Governments have refused to recognise the Soviet Union’s right to the Baltic States of Estonia, Latvia and Lithuania, occupied following a secret agreement between Hitler and Stalin, the present Australian Government has now extended such recognition contrary to international law and moral principles. The undersigned petitioners humbly beg Parliament to condemn such an action and to reverse the Government’s decision.

And your petitioners, as in duty bound, will ever pray. by Mr Jacobi.

Petition received.

Universal Health Scheme

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble petition of undersigned citizens of Australia respectfully showeth:

That the proposed Universal Health Scheme is essential to the well being of all Australians, in so far as it will-

  1. Provide that all Australians irrespective of their means will have access to a high standard of health care.
  2. Every Australian will be automatically covered for doctor’s and hospital bills thus ensuring that citizens will no longer be burdened with additional psychological strains because of inability to meet the high cost of medical treatment.
  3. It is committed, in principle, towards the ideal that an individual’s contribution to the cost of health services should be based on his or her capacity to pay- that people who derive the most financial benefit from our society should give the most for its support.
  4. It guarantees freedom of choice so that every Australian will be able to attend the doctor or hospital of his or her own choice.
  5. v) In the long term it will take the politics out of medical care and will thereby allow dedicated members of the medical profession to return to the occupation of their choice- the care of the ill and the prevention of disease.

Your petitioners therefore humbly pray that the Government will hasten to introduce this much needed scheme so that health care services in Australia can begin to function equitably, efficiently, and economically.

And your petitioners, as in duty bound, will ever pray. by Mr Morris.

Petition received.

Political Prisoners in Indonesia

To the Honourable the Speaker and Members of the House of Representatives in Parliament assembled. The humble Petition of the undersigned citizens of Australia respectfully showeth:

That many Australians believe that thousands of political prisoners have been detained for long periods in Indonesia, without trial, legal advice or cultural and educational activity, have been subjected to forced labour and often suffer from malnutrition.

That any such prisoners would face great difficulty in reintegrating into society on release.

Your Petitioners therefore humbly pray that the House urge the Prime Minister to make known publicly to the Indonesian authorities when he visits Indonesia the concern of Australians about the plight of Indonesian political prisoners.

And your Petitioners, as in duty bound, will ever pray. by Mr Peacock.

Petition received.

page 1252

QUESTION

PRIME MINISTER’S VISIT OVERSEAS

Mr SNEDDEN:

– Is it the intention of the Prime Minister to go overseas shortly at the same time as the Deputy Prime Minister will be overseas? During what dates will the Minister for Minerals and Energy be the Acting Prime Minister of Australia?

Mr WHITLAM:
ALP

- Mr Speaker, the answer is from 3 October until 12 October, both dates inclusive.

page 1252

QUESTION

ASSISTANCE TO PRIMARY PRODUCERS

Dr GUN:

– Has the attention of the Treasurer been drawn to a report of a meeting of primary producers held last weekend and sponsored by a body known as the National Action Group? Has he been able to ascertain whether this meeting called for the payment of $100m of other people’s money to farmers through such benefits as superphosphate and petrol bounties? If that is the case, is the Treasurer prepared to impose a head tax of $8 on every man, woman and child in Australia to enable the wages and salaries of other Australians to be transferred to this sectional interest?

Mr CREAN:
Treasurer · MELBOURNE PORTS, VICTORIA · ALP

– I am not aware of a meeting being held or even of the body that has been mentioned. But the Government’s plans certainly will be announced at 8 o ‘clock tonight.

page 1252

QUESTION

TELEPHONE CHARGES

Mr FAIRBAIRN:
FARRER, NEW SOUTH WALES

– Does the Prime Minister recall saying in his 1972 election policy speech that a Labor Government’s first help for regional development would be to implement the Victorian decentralisation committee’s recommendation that ‘centres nominated for accelerated development be recognised for telephone charging purposes as extensions of the metropolitan area whereby rentals would be equated and calls between these places and the capital charged as for local calls’? Did he go on to say that ‘in our first term of office, a Federal Labor Government will concentrate its own initiatives and endeavours on two areas- Albury-Wodonga and Townsville’? Is it a fact that Albury-Wodonga residents, in common with all Australians, have not only not had a decrease in telephone charges since his Government came to office but have had savage increases imposed with more promised? I ask the Prime Minister whether he ever intended to implement this promise, or was it just an election gimmick?

Mr WHITLAM:
ALP

-The honourable gentleman accurately quoted from my policy speech for the election held on 2 December 1972. One of the early actions by my Government was to set up a royal commission under the chairmanship of Sir James Vernon to inquire into the Post Office in general. One of the matters referred to the commission concerned those proposals for reduced telephone and telex charges in regional centres which had been recommended by the Victorian Decentralisation Committee in Victoria. The report of Sir James Vernon’s royal commission was promptly tabled. It is being considered by the Government. Complementary action may be required by the Victorian government. The general theme is that if there are to be concessions in regional areas they should not be borne by subscribers to the telecommunications services alone but by the taxpayers overall. The Government has promptly- it could not have more promptly- promoted the development of Albury-Wodonga. The Government was elected on 2 December. My colleague, the Minister for Urban and Regional Development, and the Premiers of New South Wales and Victoria met in Albury-Wodonga on 25 January 1973. The basic legislation has now been passed by the 3 Parliaments. There is in Kings Hall at the moment an exhibition which I commend to honourable gentlemen concerning the progress of Albury-Wodonga. Similar progress has not been possible in Townsville because of the intransigence of the Queensland Government.

page 1253

QUESTION

FUEL SUPPLIES: NORTH QUEENSLAND

Mr FULTON:
LEICHHARDT, QUEENSLAND

-My question, which is directed to the Minister for Northern Development, refers to fuel supplies for north Queensland. I believe that the ‘W. H. Leonard’ will not arrive in Cairns until 29th of this month and that it will contain only a small portion of distillate for Cairns and district. Are there any other vessels due in Cairns before or after this date? Industry in the area of Leichhardt is short of fuel, particularly distillate, to enable it to keep operating until the twenty-ninth. I refer to local authorities and the tobacco, timber, fishing and sugar industries. Can the Minister advise me and the people in the area what relief can be expected in the immediate future and what steps have been taken? I know that the Minister has been vitally concerned in this matter.

Dr PATTERSON:
Minister for Northern Development · DAWSON, QUEENSLAND · ALP

– It is a fact that in the last 2 months a series of problems has arisen in north Queensland in regard to the supply of fuel, particularly distillate.

Mr Anthony:

– What about New South Wales?

Dr PATTERSON:

– The question happens to be asked about north Queensland. If it had not been for the supply of 150,000 gallons of distillate from the naval stores in Cairns the entire sugar industry would have had to close down in the area north of Townsville. Due to the cooperation of the Minister for Defence and the Minister for Science who was Acting Minister for Defence at the time this amount of distillate was made available. It is a fact that the initial problem was caused by industrial troubles in Brisbane. This has shown that there are very serious inherent problems in regard to the supply of fuel to central and northern Queensland which should be looked at very quickly by State and Federal authorities as well as by industry. These authorities should look at the capacity of the Ampol and Amoco refineries in Brisbane, the capacity of the Queensland Railways, the capacity of only one ship, the ‘W. H. Leonard’, to supply the whole of north Queensland, and also the problem of not having sufficient storage facilities in north Queensland.

This same problem was experienced during the floods and it is experienced following cyclones. Here again the complete vulnerability of north Queensland has been demonstrated. Next Monday a ship called the ‘Texaco Bogota’ will call into Townsville with 15,000 tons of distillate. On the following day the ‘W. H. Leonard’ is scheduled to discharge approximately 3,100 tons at Townsville. On Thursday week the ‘W. H. Leonard’ is due to discharge something like 4, 100 tons in Cairns. The position is tight; there is no question about that. The oil companies and the industries concerned are looking at a system of rationalisation which could mean the rearrangenent of fuel supply for the Cairns district when the ‘Texaco Bogota’ discharges its cargo next Monday. I can assure the honourable member that the matter is well in hand. I stress that the present problems are due to 23 years of the Opposition’s refusal when in government to provide ships to serve north Queensland and its refusal to put pressure on the Queensland Government to allow the refineries in Queensland to have a greater capacity.

page 1253

QUESTION

FUEL SUPPLIES

Mr ANTHONY:

-The Prime Minister will know that industrial action over recent weeks and months has caused serious disruption of fuel supplies. I ask the Prime Minister whether he knows that the serious dislocation of fuel supplies still exists with the storage and distribution system now virtually exhausted. Will the Prime Minister do all he can to rectify the present position and will he consider two suggestions which might lessen the chances of such disruption occurring in the future? Firstly, will he immediately set up a committee of Ministers, comprised of such people as the Ministers for Minerals and Energy, Transport and Defence, to consult the oil industry, the unions and State authorities with a view to building some safeguards into the storage and distribution system? Secondly, will he ask the royal commission which is at present inquiring into the petroleum industry whether it will look into the matter of fuel distribution with a view to recommending measures which might reduce the prospects of similar disruption in the future?

Mr WHITLAM:
ALP

- Mr Speaker, the right honourable gentleman has given you notice that he wishes to raise a matter of public importance in these terms. My colleagues will give him detailed replies to his questions. My colleague, the Minister for Northern Development, has touched on one of the particular difficulties there have been in the distribution of fuel supplies in Queensland. There are 2 factors. There is not sufficient production capacity in Queensland and there is an inadequate distribution system there. Ever since I became Prime Minister, I have been in correspondence with the Premier of Queensland, urging him to allow Australian Government ships to trade between ports in that State. It is a fantastic situation that there is one refinery in Queensland and one oil tanker alone which is allowed to operate.

Mr Anthony:

– There are 2 refineries.

Mr WHITLAM:

-It is a fantastic situation that the owner of one of those refineries has the single ship which distributes fuel along the coast.

page 1254

QUESTION

CYPRUS

Mr GARRICK:
BATMAN, VICTORIA

-Will the Prime Minister use his good offices with all governments concerned to urge a return to constitutional rule on the island of Cyprus as it existed before fighting began on 20 July?

Mr WHITLAM:
ALP

-Australia is a member of the Security Council, and our representative there, Sir Laurence Mclntyre is using his best endeavours to bring the contending parties together. There is some hope that the Acting President of Cyprus, Mr Clerides, and the leader of the Turkish community, Mr Denktash, have developed sufficiently good relations, one with the other, to preclude a recurrence of hostilities, and to facilitate an exchange of those who have been displaced from their homes.

page 1254

QUESTION

FUEL SUPPLIES

Mr IAN ROBINSON:
COWPER, NEW SOUTH WALES · CP; NCP from May 1975

-I address my question to the Prime Minister. I refer to the previous questions concerning the serious crisis facing the countryside due to the shortage of fuel, particularly in New South Wales and Queensland. Why did the Prime Minister refer only to Queensland in his previous answer and can he now tell the House what action is being taken by the Government to restore supplies to north and north-west New South Wales where many areas have a complete absence cf essential fuel, both petrol and distillate? What steps will be taken to maintain an adequate supply in the future? Can the Prime Minister give the reasons why there is inadequate fuel in the important industrial sections as well as the country areas of New South Wales?

Mr WHITLAM:
ALP

-The honourable member’s Leader has raised this as a subject for discussion as a matter of public importance. It will be debated immediately after question time.

page 1254

QUESTION

TASMANIAN FREIGHT RATES

Mr COATES:
DENISON, TASMANIA

-Is the Minister for Transport aware of the reaction in Tasmania to the recent announcement of increased charges by the Australian National Line? Can the Minister say why the increase is necessary while the Nimmo inquiry is still continuing?

Mr CHARLES JONES:
Minister for Transport · NEWCASTLE, VICTORIA · ALP

-Yes, I am aware of the problems associated with increased freight rates in Tasmania.

Mr Lynch:

– When were you last down there?

Mr CHARLES” JONES:
Minister for Transport · NEWCASTLE, VICTORIA · ALP

– About a week or 10 days ago. I am aware of the problems associated with the increased’ charges. Yesterday afternoon and again this morning I met with some honourable members and honourable senators from Tasmania and I will be seeing them again on either Wednesday or Thursday this week. There are problems associated with the increase. Let us face the facts of life. The facts of life are that the Australian National Line has incurred substantially increased costs in its operations both in the form of labour costs -

Mr Sinclair^ You are a member of the Government which caused it, so you ought to know.

Mr CHARLES JONES:

-If the honourable member wants a few facts on the matter, then I can easily give them to him. Some of the increased costs were incurred at a time when the honourable member was a member of the former Government. For example, in July 1972 the salary bill of officers of the Third Division of the Australian Public Service increased by $46,000. 1 could go on for some time elaborating on the increases that were incurred when the present Opposition was the Government in this country, but I do not want to weary honourable members.

When we were in Opposition we did not object to increases in the charges levied by ANL because we realise that its increased costs have to be passed on. In 1972-73, when the honourable member for Gippsland was partly responsible, as I was, ANL incurred a loss of $ 1.65m on its general cargo operations. It is estimated that a loss of $3. 8m will be incurred in the year 1973-74. Unless ANL’s freight rates are adjusted, the loss for 1974-75 will be about $7.4m. No honourable member can justify increased losses of this type. It is reasonable that the user should pay for the cost of the service provided. Consider what ANL’s competitors in the Tasmanian trade have done. The Union Steam Ship Co. in recent months has increased its freight rates on the Melbourne-Sydney run by 27.68 per cent and on the Sydney-Hobart run by 25.5 per cent while Associated Steamships Pty Ltd increased its charges by 33.3 per cent. So ANL’s increase of 25 per cent is quite reasonable and quite moderate. Protests are being made at the moment about the increase, but there were no similar protests when ANL’s competitors increased their freight rates.

The honourable member asked me why we did not wait until the Nimmo Committee’s report was tabled. I do not know when the

Nimmo Committee will present its report, but I can give the honourable member one small piece of information: When the Tasmanian ports committee recently decided to increase port charges, it was suggested to the committee that it might await the Nimmo Committee report and its findings. It refused to do so. I believe that indirectly port charges are the responsibility of the Tasmanian Government so there is one law for the Tasmanians and one law for the Australian Government. The Tasmanian Government is protesting very strongly about our decision to increase ANL’s freight rates by 25 per cent, but at the same time it has increased its own rail rates by between 25 per cent and 33 per cent. The road hauliers have increased their charges by an even greater amount. Others have had to increase charges.

We do not claim to have any great power to avoid the increases we have made. They were necessary and we put them through. What do they represent as individual charges? It is important that I pass this information on to honourable members. ANL has already noted examples of freight forwarders increasing the total freight charge by 25 per cent. In other words, they have been trying to pass on to consumers in Tasmania more than they should. I strongly advise manufacturers and others in Tasmania to examine the freight rate charges which are being levied against them. After all, the sea leg element of the cost represents only 40-45 per cent of the total. We have already noted numerous examples of freight forwarders in Tasmania increasing their total charge to the manufacturer by 25 per cent. The increase in ANL’s charges represents an increase of $2.40 to $2.80 per ton. Whilst the freight rate is much greater, it includes wharfage and land-based freight forwarders’ charges. The sea leg represents about 40 per cent of the freight rate.

page 1255

QUESTION

TREASURY PAPERS

Mr LYNCH:

-Does the Prime Minister recall his commitment during the 1972 election campaign that a Labor Government would publish the Treasury’s economic forecast? Can the Prime Minister say why he has failed to honour this commitment? Will he now authorise disclosure of the Treasury forecast for the year ahead, and in addition, request the Treasury to publish the Treasury’s pre-Budget White Paper which the Government has refused to release this year?

Mr WHITLAM:
ALP

– There is a question on notice on this matter from the Leader of the Opposition. The brief answer is that up to this stage the Treasury has persuaded me, as it persuaded previous Prime Ministers and Treasurers, that such forecasts should not be published. It has not completely convinced me. Nevertheless, up to this stage I have adhered to the advice which it gave to my predecessors.

page 1255

QUESTION

CLOTHING AND FOOTWEAR

Mr COHEN:
ROBERTSON, NEW SOUTH WALES

-Is the Minister for Overseas Trade aware that gross profit margins of between 200 per cent and 300 per cent are being made on clothing and footwear imported from overseas countries? Is a large part of these profits due to the tariff cuts and revaluation decisions made by the Government with the intention of reducing the prices charged to Australian consumers? In view of the excessively high retail prices of imported goods will the Minister explore the possibility of the Government imposing price control on imported clothing and footwear?

Dr J F CAIRNS:
LALOR, VICTORIA · ALP

-In the last seven or eight months there has been a considerable increase in the value and volume of imports that have come into Australia. That has had quite a number of effects. One is that a far larger quantity of goods has therefore been available for Australian consumers to buy. That must have reduced the extent and effect of inflation during that seven or eight months period.

Mr Nixon:

– By how much?

Dr J F CAIRNS:
LALOR, VICTORIA · ALP

– Professor Swan expressed a written opinion in the ‘Australian’ newspaper last week that it would have been 10 per cent greater now if those steps had not been taken. However, I am concerned at the fact that evidence has been accumulated over the last two or three months of very excessive retail profit margins. It is true that in some cases they have been as high as 300 per cent. Many of between 140 per cent and 250 per cent have been proved to my satisfaction. It is commonly known, of course, that retail profit margins vary a great deal and that where the average is 50 per cent or 60 per cent there can sometimes be a deviation to as much as 300 per cent. That has been a very common practice over a long period of time. However, the matter is so serious and in some ways the margins have been so great that the Government considers that it is justified in attempting to see whether an effective system of price regulation may be based on the constitutional powers that the Government has in relation to imports. The matter has been under examination for some time. I had hoped that retailers would respond by fixing more reasonable margins. So far we have had no evidence of their doing so. Provided the system that I have just indicated briefly is a workable one, the Government will seriously consider its introduction.

page 1256

QUESTION

TASMANIAN ECONOMY

Mr SNEDDEN:

-My question is addressed to the Minister for Transport. I ask: Have the Minister for Defence, Mr Barnard, the honourable member for Wilmot, Mr Duthie, and the honourable member for Braddon, Mr Davies, been to see the Minister to explain to him the very serious downturn in the economic conditions in the State of Tasmania? Have those gentlemen explained to the Minister the very great reliance that the State of Tasmania places on shipping services from the State to the mainland and that the increases imposed by the Australian National Line on shipping freight rates is a further blow to the level of the economy in Tasmania? If they have done all those things, will he now reconsider the increases in the freight rates charged? If they have not done those things will he call upon each of them- the Minister for Defence and the honourable members for Wilmot and Braddon to make clear to him their personal experiences of the very bad situation that exists in Tasmama? Finally, will the honourable gentleman reconsider the answer that he has just given so that he can make it clear to the Tasmanian people that criticism of a State Labor Government in Tasmania is no excuse for the failure of a Commonwealth Labor Government to take the appropriate action in relation to freight rates to and from Tasmania’

Mr CHARLES JONES:
ALP

-I recollect that some time about 1970-71 when the right honourable gentleman was a member of a former Government an inquiry was set up to examine freight rates to and from Tasmania and a number of other things. An increase that had just been put through then probably had as much effect on the Tasmanian economy as the present increase in freight rates will have. That inquiry, which was instituted by the Liberal and Country Party Government of that time, found that the freight rate increase was fully justified.

Mr Sinclair:

– An entirely different circumstance.

Mr CHARLES JONES:

-Of course it was entirely different because the honourable member for New England’s mob was running the show then, and what a weird and wonderful mob it was.

Mr SPEAKER:

-Order! Interjections will cease. I am running the show from this end.

Mr CHARLES JONES:

-That is the difference-

Mr Sinclair:

– It sure is.

Mr CHARLES JONES:

-Honourable members opposite botched it up and we have been spending time ever since fixing up what they botched up. The shortage of ships and the use of unsuitable types of ships is one of the real reasons why Tasmanian freight rates are in the position in which they are at present. We are adjusting the situation now by ordering and buying new ships to meet the requirements of the Tasmanian trade. Honourable members opposite did nothing about the situation other than increase freight rates.

Mr Sinclair:

– Nonsense.

Mr CHARLES JONES:

-Honourable members opposite increased freight rates and they know it They set up an inquiry which disclosed that their actions were fully justified. They loaded the membership of the inquiry so that it would come up with that decision.

The Prime Minister has said that he will take steps to examine the freight rate differential and the problems associated with it. The Nimmo Committee has been appointed to investigate the matter and come up with recommendations to the Government as to what form of assistance should be given. It will not be like the assistance that was handed out by the Australian Country Party to the cockies of this country. It pulled ideas out of its head without giving real consideration to what effects their implementation were going to have. All we are trying to do is to make sure that the assistance that is given is in the interests of Tasmania. So it will be fully researched.

Let us deal with the facts. Unless an adjustment is made the loss on the Tasmania-mainland run this year will be $3.8m made up of a loss of $2. 85m on the Tasmania-Melbourne section and $0.95m on the Tasmania-Sydney section. The Government believes that it is unfortunate but nevertheless unavoidable that these increases have to be introduced. It is just a fact of life that increases will have to be introduced unless we are prepared to subsidise the service, which we are not prepared to do at this stage, even though we are providing a subsidy of $lm a year for the ‘Empress of Australia’, which is something that the former Liberal-Country Party Government was not prepared to do. That $lm subsidy is being provided in an endeavour to ensure that the ‘Empress of Australia’ is retained on the service.

page 1257

QUESTION

TERTIARY ALLOWANCES SCHEME

Mr MARTIN:

– My question is directed to the Minister for Education. I refer to the tertiary allowances scheme and in particular to the bricklaying course which is being run at Randwick Technical College. By way of preamble I state that on 30 July 1974 one of my constituents was advised that die course was an approved course under the tertiary allowances scheme but that so far he has not received one zac in payment. My question is: In view of the fact that it is within my knowledge that a decision as to whether it will be paid and when it will be paid is yet to be made by the Department of Education’s head office in Canberra, will the Minister do something to get the Department off its backside and release the decision?

Mr SPEAKER:

-Order! Would the honourable gentleman spell ……., for Hansard, please.

Mr BEAZLEY:
ALP

– I would be surprised if a decision on an individual case were being determined in Canberra. When applications are made for tertiary allowances they are usually made in the State office. I am not going to accept automatically that the officers are at fault and that everything was perfect with the application or that the entitlement is not in dispute. There has been an enormous increase in the number of individuals receiving tertiary grants. When there was an increase this year the officers of my Department in the States and elsewhere were working overtime 3 nights a week and also all Saturday processing the applications. I will not say that the officers concerned are infallible and that all the decisions have been perfect. Sometimes appeals come through to me and sometimes the decisions are reversed.

Mr IAN ROBINSON:
COWPER, NEW SOUTH WALES · CP; NCP from May 1975

– What about the means test?

Mr BEAZLEY:

– Yes, there is a means test. It was inherited from the previous Government and is virtually identical to that of the previous Government except that the income limit has been increased each year. The amount of money has been increased.

Mr Hunt:
Mr BEAZLEY:

-Of course. That has always been the case in all the adjustments over the years. The increases have been in response to a changed purchasing power of money; I do not dispute that. If the honourable gentleman gives me the details of the case, the name of the individual, I will certainly see whether there have been unjustifiable delays and whether the man concerned is eligible.

page 1257

QUESTION

ADVERTISING OF THERAPEUTIC GOODS

Mr LLOYD:
MURRAY, VICTORIA

– My question is addressed to the Minister for Health. I understand that the Minister has presented a final draft proposal for new regulations to restrict further the advertising of therapeutic goods. Is it the Minister’s intention to invoke unilaterally that part of the regulations which relate to the air media or does he intend to await the views of the States on the uniformity of regulations affecting all the media?

Dr EVERINGHAM:
Minister for Health · CAPRICORNIA, QUEENSLAND · ALP

– This matter was raised with the Health Ministers at their recent conference. The fact that this was done is an earnest of our intention to co-ordinate our legislative activities with those of the States to ensure that advertising is not misleading and is in the interests of the consumer of therapeutic goods. I hope that the States will honour the undertakings they gave on that occasion and will move rapidly to implement the recommendations upon which we achieved this consensus. But, of course, if there are unforeseen delays we would not feel bound to wait for the initiatives of the States as some of our predecessors did.

page 1257

QUESTION

PRODUCTION OF PAPER FROM KENAF

Mr MORRIS:
SHORTLAND, NEW SOUTH WALES

-I ask the Minister for Manufacturing Industry, in view of the worldwide paper shortage, whether paper can be produced from the plant kenaf. If so, is it feasible that a sufficient quantity could be grown in Australia to have an impact on the shortage of paper in this country?

Mr ENDERBY:
Minister for Manufacturing Industry · ALP

-As is well known, there is and has been for some little time a worldwide shortage of paper. Resulting from that, consideration has been given from a number of sources to the supply of alternative raw materials for the manufacture of paper. Kenaf is one such material that has been studied and considered. I understand it is a tropical plant of the hibiscus family with woody stalks ranging from 6 feet to 12 feet in height and one inch to 2 inches in diameter. It is grown in some Asian countries as a substitute fibre for jute.

It has been claimed that it has the great advantage of being ready for harvesting and conversion into pulp after a growing period of only 120 days, which compares with about 20 years for the growing of timber. Limited laboratory scale tests have shown that paper can be successfully produced from kenaf but because it has not yet been grown in commercial quantities full scale commercial and industrial testing is not yet complete. My Department has some additional information and I shall make it available to the honourable member.

page 1258

QUESTION

WORLD ECONOMY

Mr GRAHAM:
NORTH SYDNEY, NEW SOUTH WALES

-My question is addressed to the Treasurer. I apologise for this question on the eve of his very important function tonight. Is the Chairman of the Union Bank of Switzerland, Dr Alfred Schaefer, known to the Treasurer or in the Treasury? Was Australia invited to the recent financial conference in London? Does the Treasurer know of reasons for a statement that there are mounting signs of a coming global financial and monetary crisis which could wreck the economy of the world? If he regards the statement as valid, does it include the socialist world?

Mr CREAN:
ALP

-To the best of my knowledge I am not aware of the gentleman mentioned. I have heard of the Bank, which is a well known institution in Switzerland. The honourable gentleman, of course, is not alone in forecasting doom for the future of Western economies. Personally, I have a lot more faith in the ability of democratic governments to survive those forebodings and I hope that with a little co-operation and understanding of the basic problems those events will not overwhelm the Western world. It will be very sad for the Western world if they do. It will mean the end of the kinds of mechanisms of government that we have and on which we pride ourselves as being the best in the world.

page 1258

QUESTION

INTEREST RATES

Mr DUTHIE:
WILMOT, TASMANIA

-I ask a question of the Treasurer. Is it not a fact that when the Australian Development Bank was established the interest rate was fixed at 6 per cent? Is it not a fact that though hundreds of farmers and industrialists signed Development Bank loan contracts at an interest rate of 6 per cent those people are today being forced to pay 1 1 per cent? Why are these borrowers, whose loans were signed, sealed and confirmed prior to the interest rate increases, required now to pay the increase? Is not 1 1 per cent a completely unreal and uneconomic rate to pay for purely developmental loans? Will the Treasurer review the interest rate for Development Bank loans negotiated and fixed years before the recent increases in the rate which is now 1 1 per cent?

Mr CREAN:
ALP

– It is an unfortunate circumstance that in order that money can be loaned to B it first has to be obtained somewhere else from A. In the face of continuing inflation nobody is disposed at the moment to accept low rates on money deposited with institutions. This is one of the hard facts of life, unfortunately. It does not apply only in Australia; it applies in all the countries that the previous questioner asked me about. If contracts were written firm with a particular interest rate they ought not to be varied but I think that probably, as is so often the case, borrowers do not always read the fine points of the relevant documents. Most lendings from banks contain provisions for the rate to be varied as the bank itself has to pay higher interest on its deposits. ‘. 1t

I am hopeful as are others, that gradually interest rates will come down rather than go up. But they will not come down in the face of continuing inflation. Whilst a lot of hard words are spoken about .inflation and there are a lot of attempts to suggest that if Opposition members were in government instead of us it would not exist, I point out again that the governments of France, Germany, the United Kingdom and the United States of America, some of which vary in political complexion from this one, have the same sort of economic problem.

page 1258

PRODUCTION OF HANSARD

Mr SPEAKER:

-I should like to inform honourable members that all Hansards from this day are being produced by the computer typesetting system at the Government Printing Office. The initial preparation of the material for the system .entails more time than it did under the previous hot metal process, although the overall time for printing is much less. Because of this preparation requirement, tables of figures and non-read material which are incorporated in Hansard can cause production bottlenecks. It would assist greatly if Ministers and members who propose to incorporate tables or documents in their speeches will supply them well in advance, and certainly before the dinner break to the Reporting Department for prompt dispatch to the Printer.

I remind honourable members that inclusion in Hansard of unread matter by leave of the House is subject to the authority of the Presiding Officer. If the Government Printer advises that the incorporation of material will present technical problems, will be costly or will unduly delay the publication of the daily Hansard, the Presiding Officer may direct that the matter be not included. Leave given to an honourable member to incorporate certain material in his speech is subject to that qualification.

page 1259

RESERVE BANK OF AUSTRALIA

Mr SPEAKER:

– I present .pursuant to statute the report and financial statements of the Reserve Bank of Australia for the year 1973-74 together with the Auditor-General’s reports thereon.

page 1259

COMMONWEALTH BANK

Mr SPEAKER:

– I present pursuant to statute the annual reports and financial statements of the Commonwealth Banking ‘.Corporation, the Commonwealth Trading Bank of Australia, the Commonwealth Savings Bank of Australia and the Commonwealth Development Bank of Australia together with the Auditor-General’s reports thereon for the year ended 30 June 1 974.

page 1259

PUBLIC SERVICE BOARD

Mr WHITLAM:
Prime Minister · Werriwa · ALP

-Pursuant to Section 22 of the Public Service Act 1922-1973, 1 present for the information of honourable members the Annual .Report of the Public Service Board for the year ended 30 June 1974.

page 1259

DRIED FRUITS RESEARCH COMMITTEE

Dr PATTERSON:
Minister for Northern Development and Minister for the Northern Territory · Dawson · ALP

– Pursuant to section 18 (1) of the Dried Fruits Research Act 1971; I present for the information of honourable members the interim third annual report of the Dried Fruits Research Committee for the year ended 30 June 1974.

page 1259

IMMIGRATION ADVISORY COUNCIL

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I have the honour to present for the information of honourable members reports prepared by the Immigration Advisory Council. One is entitled ‘Committee on Community Relations: “Interim Report-August 1974” ‘. The other is entitled ‘Committee on Social Patterns: “A Study of Older Migrants, Interim Report- June 1974” ‘

page 1259

INTER-PARLIAMENTARY COUNCIL

Report of Australian Delegation

Mr COLLARD:
Kalgoorlie

-by leave-I present the report of the Australian delegation to the 113th session of the Inter-Parliamentary Council held in Geneva between 22 and 26 October 1973.

Ordered that the report be printed.

page 1259

TRADE PRACTICES BILL 1974

Assent reported.

page 1259

FUEL SHORTAGES IN AUSTRALIA

Discussion of Matter of Public Importance

Mr SPEAKER:

– I have received a letter from the Leader of the Australian Country Party (Mr Anthony) proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The serious disruption of the community, of industry and of Australia’s defence capacity by continuing fuel shortages.

I call upon those members who approve of the proposed discussion to rise in their places. (More than the number of members required by the Standing Orders having risen in their places)-

Mr ANTHONY:
Leader of the Australian Country Party · Richmond

– Australia is living on the edge of a precipice as far as fuel is concerned. It is an indictment of the Government, which claims to have such close links with the unions, that the Australian community has been brought to such a state of disruption by the actions of militant unions. Australia today is 70 per cent self-sufficient in petroleum, yet the Australian motorist too often finds his service station closed, with a sign outside reading: ‘Sorry, no petrol’. Not only is the motorist’s tank empty, but also on-farm supplies are empty, the service station tanks are empty, the oil companies’ district depots are empty and the bulk storages are empty. In fact, the whole storage and distribution system is virtually empty. The trouble is that, even if full production can be maintained, and the distribution system works properly, it will be a considerable time before the situation can be brought back to normal.

There is little doubt that there is a definite policy being followed to keep Australia’s fuel reserves at the barest minimum. The objective of this policy is to ensure that when there is industrial action in the oil industry- as happens with great frequency- there is an immediate impact, an immediate bite, so that the pressure on the community is felt quickly. I may be wrong. I hope I am. But I do not think I am. It’s very hard to escape the conclusion that the stranglehold of unions on fuel supplies is seen as providing a very good starting point for a national offensive which Mr Mundey, the President of the Communist Party of Australia has promised.

There were reports recently that the Minister for Transport (Mr Charles Jones) had told the Government that Australia had only one week’s supply of fuel, including defence stocks. This is a scandalous and dangerous situation. I have heard of other estimates which put our distillate reserves at as little as 2 days’ supply. This is an intolerable situation. Of course, for many people, there is no fuel at all. It is not a question of a week’s supply or 2 days’ supply for them- they simply have not been able to get fuel at all. This fuel shortage, the industrial action that has caused it, and other similar industrial actions, are major factors in a very serious amount of unrest that is growing throughout country areas of Australia.

In my own electorate of Richmond, for example, service stations in Lismore and Ballina have recently been closed for long periods. The ordinary activities and commercial life of the community have been disrupted. The sugar cane harvest has been threatened. Fishing fleets have been tied up in the ports. Sawmills have stopped. Transport services have been halted. Mail services have been disrupted because train services have been cut. Not only have local people been immobilised by fuel shortages, but so too have tourists, many of whom were stranded for days on the far north coast of New South Wales simply because there was no petrol.

In the electorate of Gwydir, for example, the wheat harvest has been threatened, and the preparation of the cotton crop- which must be planted by the first week in October at the latest -is being hindered very seriously.

Mr Hunt:

-A $25m crop.

Mr ANTHONY:

– Yes. The cotton industry could be wiped out if it cannot get fuel urgently. There has been concern for weeks in the sugar areas of Queensland about the supply of fuel for the sugar cane harvest. There is only a week’s supply of fuel in some cases and down to a day in others.

The Minister for Northern Development and Minister for the Northern Territory (Dr Patterson) apparently prevailed on the Government to release some fuel from our defence stocks for some areas, but the problem remains. But what is he doing to get at the root of the problem- the disruptive tactics of some trade unions? A tanker arrived in Mackay on Sunday with sufficient fuel for the district for about 3 weeks at the most, and it will be 3 weeks or a month before the next tanker load arrives.

The potato and onion crops in the Lockyer area are in trouble, school buses in many regions have been unable to run- and so the story of inconvenience and disruption continues. People living in Canberra and in many other places across Australia know only too well how hard it is to get heating oil or gas. In all this, despite repeated urgent appeals to the Government for help in cases where there has been a desperate need for petrol, distillate, oil or gas, there has been virtually no response whatsoever from the Government. There has been not even a slightest sign of interest or concern, let alone any effort by the Government to try to help. But this goes much further than disruption of agriculture and other industry and the disruption of the normal daily life of the community.

We now have the shocking situation in which our defence forces are virtually immobilised. Newspapers are publishing articles with headlines such as: ‘Please, no invasion today’. The attitude of this Government to the defence of Australia is well known, but the position becomes quite unacceptable when the small amount of defence capacity we do have is sabotaged by lack of fuel. At the moment the Navy is crippled, the Air Force is virtually grounded and the Army is hardly able to move at all because of the critical shortage of fuel. Apparently only one naval vessel- ‘Vendetta’- is operational, with the rest of the Navy tied up in port. Even our coastal patrol boats are operating on a restricted basis. We have had Fl 1 Is and Mirages in Darwin that could not return to their home bases because there was no fuel there for them when they got there. Maritime patrolling by the Air Force is also restricted. The Army has had to cancel a big exercise because there is no fuel to move the troops.

Why are we in this extraordinary situation, Mr Speaker? Why is a country which is so selfsufficient in petroleum- self-sufficient for the moment, let me emphasise- so hamstrung by a shortage of fuel? The answer is that continuing industrial action has rendered the whole production, storage and distribution system incapable of meeting our needs. The system normally can cope with the nation’s fuel needs, but it just cannot cope with today’s abnormal needs. It is not fair for the Government to try to blame the distribution system. The blame lies with the series of strikes, the union limitations and bans within the industry.

I shall give a quick run-down on the industrial actions that have caused the present crisis. Back in February 5,000 oil industry clerks stopped fuel deliveries. In March the oil tanker drivers in Sydney went on strike. In April drivers, storemen and packers went on strike. There were rolling strikes at the Australian Oil Refinery plant in Sydney. The Ampol and Amoco refineries in Brisbane were closed because the Australian Workers Union put a ban on deliveries of fuel from those refineries. In July ships’ engineers were on strike, and at one stage 53 oil tankers were tied up.

Mr Lusher:

– How many?

Mr ANTHONY:

-Fifty-three. Crude oil from Bass Strait was not being carried to the refineries. In August 8 unions were involved in industrial action in the oil industry in support of a $50 a week pay rise. The AWU in Victoria cut the flow of Bass Strait crude to a trickle. There was an overtime ban at the Banksmeadow terminal in Sydney, 3 Victorian oil refineries were closed, the Amoco refinery in Brisbane was closed and no crude was being delivered to the refineries. Then the Transport Workers Union called a national strike, and the fuel shortage was described as the worst since World War II.

Late in August the Australian Metal Workers Union applied bans in refineries and the Union’s secretary, Mr Halfpenny, said that this would eventually stop all fuel production. The AWU in Brisbane refused to load road tankers, except those bound for Ampol service stations. In the middle of August a tanker called the ‘W.M. Leonard’ was loaded with fuel in Brisbane for north Queensland, but the AWU refused to disconnect the oil hose and the tanker could not move. The same thing happened with a tanker that was due to sail for another load of Bass Strait crude. The AMWU put a black ban on some machinery at the Amoco refinery in Brisbane and stopped production. Late in August 3,000 oil tanker drivers and aircraft refuellers went on strike. On 25 August the Transport Workers Union applied an overtime ban on tanker drivers operating out of Brisbane. This became a major factor in the serious situation that developed in northern New South Wales. On 29 August another ban on supplies was imposed on the Amoco refinery in Brisbane. I have outlined briefly some of the industrial troubles that have plagued the oil industry this year and caused the crisis that now exists.

What are we going to do about all this, Mr Speaker? What is the Government going to do? I do not want to put all the blame on the Government for the present situation, because I know how difficult it is to deal with the industrial action of some of these unions. But I wonder just how long we must accept this continuing disruption of the life of the community. The ‘ Government appears to be quite helpless in the face of this problem, and of course this is not surprising in a world in which the power of the trade unions exceeds the power of elected governments, particularly this Government that we have at the moment. But there are some steps which the Government can and should take. Today at question time I asked the Prime Minister (Mr Whitlam) to appoint immediately a committee of Ministers to consult with the oil industry, the unions and State authorities with a view to trying to build some safeguards in the storage and distribution system. He ignored the question. There was no satisfactory reply.

It is beyond dispute that the basic cause of the present crisis is the industrial action of the oil industry unions. The government claims to have a special relationship with the unions. I hope the Government will make use of that relationship to try to persuade the unions of the urgent need to take greater account of the needs of the nation. I wonder whether the strikes would have occurred, and the various kinds of limitations and bans that have been imposed would have occurred, or occurred to such an extent, if the rank and file members of the unions had had a say. Very serious considerations ought to be given to the introduction of compulsory secret voting in union affairs. This should certainly be the case in the strategic industries, such as fuel, power and transport. The President of the Communist Party of Australia, Mr Mundey, says the call for secret ballots is part of the current popular game of union-bashing. Mr Speaker, I do not want to bash the unions. I want to see that unionists can express their views and not be bashed for doing so. I want to remove some of the power which Mr Mundey and others like him have to bash the Australian community.

I think the Government ought to consider the possibility of establishing some kind of fuel stockpile. If the kind of disruption we are now suffering is to be the normal order of things- and there seems little prospect that it will not be- we have to find ways to protect the community. Sweden has fuel stockpiles owned and managed by the Government for emergency use. Of course there would be major problems in this concept, but at least we have to look at it. Our defence forces clearly ought to have bigger fuel reserves. I know that fuel cannot be stored indefinitely, that there must be some turnover. This means that there would need to be co-ordination of arrangements between defence forces and other users of fuel. The storage system would need to be properly integrated with the total needs of the nation.

A further suggestion I make is that the Government ask the current Royal Commission on Petroleum to examine and report on the causes and effects of fuel shortages and to recommend measures which might reduce the incidence of such shortages. I think everyone will agree, and I am sure the Government will accept, that we just cannot have this continuing interference with the flow of fuel to the community and to our defence forces. No country can tolerate this sabotage of its activities. I hope the Government will take this matter very seriously and that it will regard the fuel industry as a vital strategic industry. It might even be necessary, because of this industry’s importance, for it to be recognised in special legislation that will protect the community in times of emergency such as exists at the moment.

We cannot afford to run away from the problem. This is a serious problem affecting every section of the community. The nation is at the mercy of a few militant unions largely being led by communists who have this nation almost throttled because of their control of these strategic industries. I desperately plead for the Government to take some immediate action to relieve the hardship and disruption which has been caused to so many people across the nation.

Mr Katter:

- Mr Deputy Speaker -

Mr DEPUTY SPEAKER (Mr Scholes)Order!

Mr Katter:

– I point out that -

Mr DEPUTY SPEAKER:
Mr Katter:

– . . . there are 2 Government members in the House.

Mr DEPUTY SPEAKER:

-Order! I name the honourable member for Kennedy. The honourable member will apologise to the Chair.

Mr Katter:

– I apologise.

Mr DEPUTY SPEAKER:

-I ask the honourable gentleman to resume his seat The honourable gentleman rose to his feet and began shouting in a most disrespectful manner. If it happens again, I will name the honourable member. It is a usual practice of the honourable member, and I will not tolerate it. I call the Minister for Minerals and Energy.

Mr Calder:

– There are only two Labor members in the House.

Mr DEPUTY SPEAKER:

-Order! There are procedures that honourable members can adopt without acting like hooligans. (Quorum formed).

Mr CONNOR:
Minister for Minerals and Energy · Cunningham · ALP

- Mr Deputy Speaker, it is the business of the Opposition in a case such as this when it has proposed a matter for discussion to keep the numbers in the House. I listened with a great deal of interest to the case put forward by the Leader of the Country Party. There are reasonable points in it- quite reasonable indeed. Of course, we can discount the usual union baiting and union hating that is generally associated with speeches that emanate from him and from his Party.

The hard facts are these: The royal commission to which he referred has already been asked to investigate precisely the matters that he has raised. We are far from satisfied with the distribution in Australia of every form of motor spirit and derivatives of crude oil. We have reason to be. One of the worst examples is that there are only two major refineries in Sydney. These are the Shell refinery at Clyde and the Caltex refinery at Kurnell. The product swapping which takes place would reveal to the ordinary motorist the fact that the products of oil companies are all the same despite the much vaunted advertising.

This matter does concern us greatly. One of the instructions that has been given to the counsel representing the Commonwealth at the royal commission is that he should ask that the production by refineries be shared. In the recent troubles that have occurred in Sydney we had complaints in one case that a rival refinery from Queensland which had won a contract for the supply of Transport Commission fuel requirements in New South Wales found that, because of a temporary shortage, the swapping arrangement did not operate. The refinery involved made sure that its own customers were served first. There must be sharing by refineries. There is one refinery in Sydney which is notorious for its provocative treatment of the trade union movement. We want no more of the general trouble that has existed between the management of that refinery and the trade union movement. We do not intend to have any more of it. A very good suggestion has come from the association representing service station owners. This is that the different oil companies ought to keep tanks at service stations sealed and filled.

Mr O’Keefe:

-What with-fresh air?

Mr CONNOR:

– This is a common thing and it ought to be done. But the refineries want cash on the nail. In most cases, service station proprietors do not have the financial capacity to meet this requirement. It is beyond them. The refineries see to that.

Mr Anthony:

– Get to the root cause of it.

Mr CONNOR:

– What the Opposition argues is not the root cause of it at all. It is refreshing indeed to hear from the Leader of the Country Party that in fact there are adequate fuel supplies in Australia. I have heard bis jeremiads time and again that Australia is going to run short of fuel. The position today is nothing of the sort. In Australia there is more recoverable fuel than ever before in terms of crude, oil and liquids associated with crude oil. The annual throughput of the refineries in Australia is 220 million barrels a year. Australia has at the moment reserves of 3,300 million barrels. That is the position up to date. It is quite remarkable that recently the Esso-BHP organisation estimated that it had an extra 22 per cent of reserves. So,’ I do not want to hear any more nonsense from’ ‘the Opposition about what the fuel position is. At present day consumption rates Australia has. 15 years of fuel supply in reserve. If honourable members divide 3,300 million barrels of reserves by the annual consumption of 220 million barrels, they should obtain the answer that Australia ;has 15 years in fuel reserves. Plenty of time should’ be available for us to follow the other alternatives that present themselves to us. If we want to- know the exact position with regard to fuel and- oil supplies in Australia as the question has been raised about the adequency of supplies, I have mentioned it and my colleague, the Minister for Labor and Immigration (Mr Clyde Cameron) will be dealing with the industrial aspects.

Mr MacKellar:

– Is this available for use?

Mr DEPUTY SPEAKER:

– I would suggest that honourable gentlemen should speak in the debate in the order that they are called. ‘

Mr CONNOR:

-To illustrate the exact position, I quote from the head of the Esso company, the main oil company in Australia in terms of throughput. I speak of Mr Kruizenga, who pointed out: . . . Australia is not one of the countries with cause for anxiety on the energy score.

Coal reserves are more than ample for the country’s needs. It looks as though there is plenty of natural gas for the foreseeable future. Uranium supplies are available for internal use and export. The only potential problem is on the crude oil side. If you go back you will see the track record has not been too encouraging for oil exploration. The only really successful area has been in the Gippsland Basin.

But even without further major discoveries, it is feasible for Australia to be reasonably self-sufficient by coupling existing resources to new technology … In a world of expensive energy and supply difficulties that’s a pretty good position for a country to be in.

Today Australia is one of the few countries- let us forget temporary disruptions caused by industrial disputes- where one can roll up one ‘-s truck or one’s car and get fuel supplies. It is the one country, with the exception of the Arab countries, where one can buy one ‘s fuel supplies at the cheapest rate possible. We have kept the price down, and we intend to continue to do so, the propaganda of the friends of Broken Hill Proprietary notwithstanding. There again, the arch culprit is the Leader of the Country Party.

On the subject of oil prices, let this also be clearly understood: The cost of Australian crude today does not vary very much from the cost of crude from the East. The reason is that the biggest part of the cost of imported crude, which is landed today at $7.25 a barrel, consists of tax. When you deduct that tax, which is taken by the respective producing countries, you will find that the crude is just about on a par with the Aus.tralian product because we have not chosen to flog the consumer and we do not intend to do so. The farmers in Australia today can buy their fuel, their petrol and distillate, cheaper than it can be bought in any other industrialised country in the world.

On the question of LPG- and very little was said about this by the Deputy Leader of the Country Party- I quote from a report from the Hydro-Carbons Branch of my Department. It states:

The LPG from refineries is distributed mainly by road wagons or rail tank cars. The volume of storage for this product is low partly because the cost of storage tanks is high. Estimates vary from $500 to $1,000 per ton of product capacity . . .

In all States the production of LPG in refineries is less than the consumption and the shortfall is met by imports of LPG from Westernport. During 1973 the refinery and petrochemical production of LPG was 338,000 tons and the usage of Bass Strait LPG in Australia was 42,000 tons, out of over 1 million tons production.

Mr Anthony:

– The whole position could be altered with a stroke of the pen.

Mr CONNOR:

– Do honourable members opposite want to learn, Mr Deputy Speaker, or do they just want to be the louts that they are?

Mr DEPUTY SPEAKER (Mr Scholes)Order! The Minister Will resume his seat. The Leader of the Country Party was heard in comparative silence. The only interjections were from his own side of the House.

Mr Calder:

– Because there were only 2 Government members in the House.

Mr DEPUTY SPEAKER:

-Order! I suggest that honourable members listen to the Minister for Minerals and Energy and extend him the same courtesy. I suggest that the member for the Northern Territory remain silent.

Mr CONNOR:

-The report continues:

LPG produced from Bass Strait at Longford is transported to Long Island Point by pipeline and there separated to propane and butane. The great bulk is shipped to Japan, but smaller quantities are shipped to New South Wales, Queensland and other States in small foreign tankers. These tankers vary in capacity from 300-900 tons: larger vessels cannot be used because of the lack of storage capacity already referred to. A particular example of this is the fact that when shipments are made to Sydney they have to be unloaded from the ship into road and rail wagons for transfer to storages. This means that the ship is held up for a much longer period than necessary, which adds to the cost of the shipment

LPG is also moved from Bass Strait by road and rail for supply to country centres in Victoria and New South Wales. There is at present no properly fitted siding for loading LPG into rail cars at Long Island Point and the procedure adopted is to carry LPG by road wagon to the siding at Bittern and transfer it there into the rail car. An additional problem for rail supply to New South Wales is the change of gauge at Albury, necessitating bogie change.

There are both physical and economic problems in supplying LPG to centres in New South Wales and Queensland from Westernport. The physical problems are the shortages of storage, snipping, and of road wagons and rail cars. The shortage sets a ceiling to the amount that can be transferred in this manner. We have been informed by several of the companies that they have road and rail wagons on order but the shortage of steel and other problems have delayed the delivery long beyond the promised date.

In regard to shipment by sea, reference has already been made to the problem of storage capacity to receive shipments, resulting in the available LPG tanker capacity being inadequate to meet the demand during the winter months . . .

The economic problem of bringing LPG from Westernport is the transport cost involved, for example the freight by coastal tanker from Westernport to Sydney is $30 per ton and the cost of carriage by road is similar. Esso quoted $30 per ton for road transport to Wagga Wagga, although the Wagga Council Gas Supply undertaking, by purchasing and operating their own road tank wagon at a cost of $60,000 claim to have reduced the cost to half of this amount. The rail freight … for transport from Bittern to Sydney is $34.55 per ton but there is also the cost of road transfer .. .

In fact, the major oil companies have been thumbing their noses at the price findings of the Prices Justification Tribunal. They sought a price of $57 a ton and were awarded a price of $42 a ton. They then said that they would prefer to burn the LPG as fuel in refineries and, alternatively, to convert it into motor spirit. You can have that at a price, and it is the responsibility of the major oil companies, who have access to the cheapest crude oil in the world today, to provide a reasonable distribution system. We intend to see that they provide it. More than that, we have referred to the Attorney-General the question of whether prosecutions should not in fact issue in respect of the flouting of the recommendations of the Prices Justification Tribunal. We believe the powers are there under section 1 8 of the Act and we intend to use them. We will also ensure that by this time next year there will be no shortage, and these people will face up to their responsibilities. They have made fantastic profits in Australia. It is their responsibility to see that LPG is provided, particularly to the country consumers.

Dr FORBES:
Barker

-Mr Speaker, we know precisely what the Special Minister of State (Mr Bowen) was proposing and this man, the Minister for Minerals and Energy, who, the Prime Minister’ told us this afternoon, was going to be Acting Prime Minister of Australia for eight or nine weeks, did not have the wit to carry out the Government’s strategy on this matter. He did not think fast enough to get that in before I rose to my feet and was called. Yet this man, who so inadequately defended his Government against the very well mounted attack by the Leader of the Country Party (Mr Anthony) earlier this afternoon, is to be left in charge of this country as the Acting Prime Minister to blunder round as he has in his portfolio of Minerals and Energy. He is a man who comes second only to the unions, the left-wingers and the communists as being responsible; for the situation we find ourselves in today. He is going to be left to blunder round as Acting Prime Minister of this country for 8 days. I did not actually add it up when the Prime Minister produced his diary this afternoon. What was his reply to the terms of his motion? Complete and absolute insensitivity, insensitivity in exactly the same, terms as the Prime Minister when he was questioned today at question time. He brushed off the shortages, the inconvenience, the unpreparedness in our defence forces with which we are left as a result of this action in our defence forces. What did he do? He talked about the price of petrol. He talked about the quantity of it; he talked about everything except the situation in which very large numbers of people find themselves, through not being able to get fuel. What is the use of having cheap fuel, what is the use of having plenty of fuel if nobody can get it, if people are exposed to tremendous disadvantages and discomforts over long periods as a result of union action which his Government is not prepared, to do anything about? It is intolerable to me that as a result of the current wave of industrial anarchy in Australia this Government should sit idly by while the front line of Australia’s defence, the brains and ships and planes of the Navy and the Air Force -

Mr Connor- And you would be out leading them with rifles. (Honourable members interjecting)-

Mr DEPUTY SPEAKER (Mr Scholes)Order! The member for Barker will resume his seat. I suggest that the Minister remain silent. I ask the Leader of the Country Party to remain silent. I suggest that those people sitting behind the honourable member for Barker who are supporting this motion also remain silent during the debate.

Dr FORBES:

– As I was saying, it is absolutely intolerable that, as a result of this Government’s condonation of industrial anarchy, it should sit idly by while the front lines of Australia ‘s defencesthe planes of the Air Force and the ships of the Navy- are completely immobilised over long periods. In Darwin only the week before last I saw, with my own eyes, because I went to have a look, 6 Fl 1 1 aircraft and a squadron of Mirage aircraft unable to return to their home bases in Queensland and New South Wales because of the fuel shortage.

Mr James:

– I rise on a point of order. My point of order is that I believe that the honourable member for Barker is deliberately misleading this house. He is untruthful.

Mr DEPUTY SPEAKER:

-Order! The honourable member for Hunter Wa resume his seat.

Mr James:

– I was -

Mr DEPUTY SPEAKER:

-Order! I am on my feet. The honourable member will resume bis seat. A point of order may be taken only on matters relating to the Standing Orders of the House. Points of explanation and debating points cannot be taken as points of order. There is no point of order in what the honourable member for Hunter is saying. If the honourable member seeks to make a point in debate at another stage, that is in order.

Mr James:

– I was in Darwin on Friday and only 2 Mirage aircraft were there.

Dr FORBES:

– Is the honourable member for Hunter saying that when I was in Darwin 2 weeks ago there were not 6 Fl 1 1 aircraft and a whole squadron of Mirage fighters there weeks after they had finished their exercises in Darwin? They were there not because they wanted to be there, not because that was the best disposition of our defence forces, but because of the utter inaction of this Government in providing them with sufficient fuel to carry out their activities. That was the case. I went there and I talked -

Mr Connor:

-Rubbish! They get their fuel from Singapore.

Dr FORBES:

-I talked to the pilots and the maintenance people.

Mr Connor:

– They get their fuel from Singapore.

Mr DEPUTY SPEAKER:

-Order! The Minister for Minerals and Energy will cease interjecting. (Opposition members interjecting)-

Mr DEPUTY SPEAKER:

-Order! I will name someone on that side if honourable members continue to keep interjecting while I am on my feet. I am doing my best protect a speaker from their side of the House and they are acting like a lot of hooligans

Mr McLeay:

– I object to that.

Mr Calder:

– Address your remarks to the Minister.

Mr DEPUTY SPEAKER:

-The honourable member for the Northern Territory will resume his seat and will remain silent. I suggest to the Minister for Minerals and Energy that he remain silent during the remainder of the debate.

Mr Connor:

– I heard him -

Mr DEPUTY SPEAKER:

-Order! The Minister will remain silent. It is necessary for me to keep order in this House.

Mr Connor:

– I heard him -

Mr DEPUTY SPEAKER:

-Order! I will be forced to name the Minister if he keeps this up. The Minister will remain silent. I ask him to do so.

Dr FORBES:

-The Minister for Minerals and Energy seems to be fairly sensitive about this problem. Not only was the front line of the Royal Australian Air Force stuck in Darwin as a result of this situation but industrial disputes also forced the withdrawal of HMAS ‘Melbourne’ from a major international exercise. We are the laughing stock of the world as a result. (Honourable members interjecting)-

Mr DEPUTY SPEAKER:

-Order! I ask honourable members to remain silent. I have asked the Minister for Minerals and Energy to be silent. If the honourable member for Hume interjects again I will name him. He is continually interjecting.

Dr FORBES:

– In what other country would a government withdraw from a major international exercise, demeaning the pride of that country? Australia was to be the principal in this major international exercise but because the Government is not prepared to do anything about industrial anarchy and provide adequate fuel supplies to take part in that exercise -

Mr Connor:

– We did not want to provoke a major industrial upheaval, and you did.

Dr FORBES:

-Because the Government did not want a major industrial upheaval and it knew that the defence of the country was involved, the pride of the country was involved, this Minister, who is going to be the Acting Prime Minister -

Mr Connor:

– We did not want a major industrial upheaval.

Mr Staley:

– I rise on a point of order, Mr Deputy Speaker. Do Ministers have some special privilege which enables them constantly to flout your rulings?

Mr DEPUTY SPEAKER:

-I think that if the honourable member had been in the chamber earlier he would have noticed that the Leader of the Country Party did exactly the same thing. I have asked the Minister to remain silent.

Dr FORBES:

– The defence of this country was involved, the pride of this country was involved, the commitments of this country were involved, our position in the world was involved; yet this Minister who for 8 days is to be left as Acting Prime Minister of Australia says: ‘We did it because we did not want to create industrial upheaval’. That was his interjection. It will be recorded in Hansard. This Minister is going to be the Acting Prime Minister of Australia. I hope that the Prime Minister (Mr Whitlam), after seeing this Minister’s performance today, will have another think about his decision to leave the Minister in charge because it will be absolutely disastrous. Not only was the ‘Melbourne’ held up but the industrial situation also held up the fitting and repair of most of the Royal Australian Navy’s major ships. It brought the RAAF and RAN flying training to a standstill. Surveillance of the Australian coast by RAN patrol boats from Cairns ceased during this period yet the Government could not care less. The fact is that Indonesian fishermen are landing on our coast at the risk of foot and mouth disease to the stock of Australia. There is an inadequate number of patrol boats.

Mr DEPUTY SPEAKER:

-Order! The honourable member’s time has expired.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I think we can get some idea of how seriously the Opposition is treating this matter when it allows not the Leader of the Opposition (Mr Snedden) to introduce it but the Leader of the Australian Country Party (Mr Anthony). It was not the Deputy Leader of the Opposition (Mr Lynch), not the honourable member for Wannon (Mr

Malcolm Fraser) who is a man of some substance, not the honourable member for Wentworth (Mr Ellicott) who is another man of substance, and not the honourable member for Mackellar (Mr Wentworth) who is a man of substance too, who supported its introduction but none other than the most junior person sitting on the front bench, opposite, a man who got there only by the skin of his teeth and because he happened to have, dinner at the lobby with Mr Snedden the day before he selected his front bench. He has no other virtue and no other claim to fame.

Mr Connor:

– Was he sober?

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I do not know whether he was or not.

Mr Malcolm Fraser:

- Mr Deputy Speaker -

Mr DEPUTY SPEAKER:

-Order! The honourable member will resume his seat. (Honourable members interjecting)-

Mr DEPUTY SPEAKER:

-Order! If honourable members do not keep quiet I will name them.

Mr Peacock:

– It was a pretty terrible interjection.

Mr DEPUTY SPEAKER:

– I warn the honourable member for Kooyong. Honourable members will remain silent. If honourable members want the Chair to do anything, I suggest they -give the Chair the opportunity. I suggest to the Minister that he withdraw that remark. It was not in the best interests of the Parliament.

Mr Connor:

– I withdraw it.

Mr DEPUTY SPEAKER:

– I meant the Minister for Labor.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– What is it you wish me to withdraw?

Mr DEPUTY SPEAKER:

-The remark that you do not know whether he was sober or not.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I do not know. I know he had a bad back.

Mr DEPUTY SPEAKER:

-I ask you to withdraw it.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I am not going to withdraw the remark about whether I knew whether he was sober or not.

Motion (by Mr Killen) proposed:

That the Minister for Labor and Immigration be no longer heard.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I did not put a breathalyser on him. How could I know?

Question resolved in the negative.

Mr Malcolm Fraser:

– I rise on a point of order. If the Standing Orders for the protection of honourable members and for the upholding of the common decency which ought to prevail in this House are to mean anything at all- with respect, Mr Deputy Speaker, you are at the moment the custodian of those Standing Orders and the decency of this House- the Minister for Labor and Immigration should withdraw that remark. He has refused to withdraw it. He repeated what he said. If there were any fairness in this Parliament the Minister for Labor and Immigration would be named. If he is not named I can only suggest, with respect, that we on this side will know precisely how the Chair will behave on every occasion.

Mr DEPUTY SPEAKER:

– The Minister has had time to consider the matter. I ask the Minister whether he will withdraw the remark.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I withdraw that I -

Mr Giles:

– Give an unqualified withdrawal.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

-Just a minute. No, I will not give an unqualified withdrawal; I will give a very qualified one. The withdrawal I give is that I do not know whether he was drunk or sober. Therefore, since I do not know whether he was drunk or sober, I give him the benefit of the doubt.

Mr DEPUTY SPEAKER:

– It is most unusual for a Minister of the Crown to be dealt with by the Chair, as it is for Leaders and Deputy Leaders of the Opposition. I ask the Minister whether he will withdraw the remark.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– I do not know whether some of those who are interjecting now are drunk or sober.

Mr Deputy Speaker:

– I ask the Minister to withdraw it. I will give him another opportunity.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

-All right, Sir, I suppose I will have to withdraw it.

Mr Malcolm Fraser:

– Is that really adequate, Mr Speaker?

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

– It is all you are going to get.

Mr DEPUTY SPEAKER:

– The Minister has withdrawn. I have accepted withdrawals from the Opposition side in similar circumstances. I have always given everyone an opportunity to withdraw. The Minister has withdrawn the remark. I call the Minister for Labor and Immigration.

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA · ALP

-The only solution we have got from the Opposition to all of the problems that we are now debating is that there ought to be compulsory secret strike ballots. Anyone would think that this was a novel or revolutionary idea that has just been dreamed up and that would have been put into the statute book years ago if the Opposition could have thought about it and presumably, if it had been accepted by the Opposition when it was in government for 23 years, it would have used that section of the Conciliation and Arbitration Act to force a secret ballot.

Le me tell the House something about the Act. It appears that those who have taken part in the debate so far from the other side know little about it. For nearly 50 years now there has been a provision in the Act to permit this sort of thing to be done. For the 23 years that the Opposition was in government it did not once as a government invoke the provision of the Act that gave it the right to order a secret ballot in respect of strikes. The reason that it did not do it is that it could not do it No government can do it. The Act says that where an organisation is a party to an industrial dispute and where the Conciliation and Arbitration Commission thinks that the settlement of the dispute would be encouraged or assisted by ascertaining the views or attitude of the members of the organisation in relation to the matter, the Commission may order that a vote of those members for the purpose of ascertaining their views or attitude in relation to that matter be taken by secret ballot in accordance with the directions given by the Commission. The Commission can order the ballot to be taken by the Registrar and the Registrar can order that it be taken by the electoral officer. The powers of the Commission are exercisable only by a presidential member or by a full bench and not otherwise. That is not our section; that is the section which was put into the Act by the Opposition when it was in government The Opposition proposed that in no circumstances could the government exercise this power.

The Act then goes on to say that where the Commission orders the holding of a secret ballot, it may order and direct the organisation concerned to make arrangements for the conduct of the ballot by a person approved by the Industrial Registrar. An organisation to whom the direction has been given under this section shall comply with the direction. A person shall not, in connection with a ballot ordered by the section, obstruct the taking of the ballot, use any form of intimidation, threaten, or in any way suggest that a person might vote in a particular way or that he be forced to omit to vote or that he be forced to support or oppose a proposition or that he should promise to vote or that he should show his ballot paper to any other person than the person who is registering the vote. The penalty for anybody who commits an offence against these sections of the Act is a cool $500 or imprisonment for 6 months or both. That can be done at any time an employer chooses to make an application to the Commission.

Only the party to an award has the power to make an application, not the government. This was the decision of the present Opposition. It was the Opposition’s amendment to the Act in 1972 that made it quite clear that the Government could never in any circumstances make application. It was the Opposition’s amendment which said that only those who were parties to the award would have the right to apply. It was the Opposition’s amendment which said that the application can be heard only by a presidential member or by the full bench of the Commission. So what does the Opposition mean when it talks about secret ballots? The only occasion on which a secret ballot has ever been held under this legislation was in 1929 during the famous or the infamous, depending how one looks at it, timber workers’ strike. When the secret ballot was held more than two-thirds of the membership voted in favour of the strike continuing and, having done that, it was then found that they had to stick by the decision. I move:

That the business of the day be called on.

Question resolved in the affirmative.

page 1268

CUSTOMS TARIFF PROPOSALS

Dr J F CAIRNS:
Minister for Overseas Trade · LALOR, VICTORIA · ALP

– I move:

Customs Tariff Proposals No. 11 (1974)

Customs Tariff Proposals No. 1 1 (1974) which I have just tabled, formally placed before Parliament, as required by law, tariff changes introduced by Gazette notice on 20 August 1794. Honourable members will recall that on 18 July when I introduced tariff proposals arising from the Tariff Board’s report on ‘Film Processing Industry; Advertising Film (Value for Duty)’ I mentioned that the changes relating to exposed and developed plates or film, other than cinematograph film, were being withheld pending the completion of international negotiations. These negotiations have been completed and a rate of 14 per cent applied to lantern slides, film strip transparencies and stereoscopic views. Other plates and film, other than cinematograph film, are now dutiable at 35 per cent.

Proposals No. 11 (1974) also corrects an anomaly in the expression of the developing countries rate applicable to certain paper and paperboard. In addition provision is being maintained in the scheme of tariff preferences for developing countries for admission until 31 December 1974 of certain men’s and boys’ overcoats at a concessional rate of 10 per cent subject to quota limitations. I commend the Proposals.

Debate (on motion by Mr Adermann) adjourned.

page 1268

QUEENSLAND GRANT (ROSS RIVER DAM) BILL 1974

Bill presented by Dr Patterson, and read a first time.

Second Reading

Dr PATTERSON:
Minister for Northern Development and Minister for the Northern Territory · Dawson · ALP

– I move:

That the Bill be now read a second time.

The purpose of this Bill is to authorise a nonrepayable grant of $2.56m to the Queensland Government towards the cost of constructing stage 2 of the Ross River Dam near Townsville. The Queensland Government and the Townsville City Council will together meet the balance of the cost of stage 2, at present estimated at $5. 12m. The construction of stage 2 is being advanced to ensure adequate water supplies for the fast growing population of Townsville and neighbouring areas in the Shire of Thuringowa now totalling about 80,000 persons and expected to reach 100,000 by 1980. Stage 2 of the dam construction will ensure an additional daily supply of 83.8 megalitres (18.4 million gallons) bringing the total daily supply for Townsville and its environs from all sources to about 166.4 megalitres (36.6 million gallons) for domestic, industrial and municipal purposes. It will also provide for increased domestic consumption levels which are limited by the present restrictions because supplies are often severely inadequate over drier periods.

There are other important implications for Townsville in stage 2 of the Ross River Dam project. Flood mitigation storage will be increased and Townsville will be virtually secure from flooding in the Ross River. This will enable the City Council to plan with confidence the future use of large areas of flood-prone land under its control. Further, this storage of some 417,000 megalitres (338,000 acre feet) only 30 kilometres from the centre of the largest city in northern Australia should provide valuable opportunities for relaxation and recreation. Proposals are being examined to have the storage area declared a flora and fauna reserve. The construction of stage 2 involves raising the height of the stage 1 spillway by 6.5 metres (21.5 feet) and the embankments by 4 metres (13 feet), including the placement of some 1.53 million cubic metres (2 million cubic yards) of earth, sand and rockfill. In addition, about 16 kilometres (10 miles) each of the Flinders Highway and the Great Northern Railway will need to be relocated due to the enlargement of the storage area.

Townsville is a city of considerable importance, not only to the north, but to Australia generally. Its major industries are export-orientated, based on the rich resources of its hinterland including a copper refinery to process concentrates from Mount Isa, a nickel refinery now under construction to handle the output from the Greenvale nickel deposits and 3 abattoirs, two of which process livestock mainly for export. Townsville also handles exports of sugar from the Burdekin region, one of Australia’s most important sugar districts. Townsville has been selected by the Australian Government as a possible growth centre. Indeed, its growth over recent years owes much to Australian Government decisions, such as the location of defence installations, the establishment and growth of the James Cook University and work now in progress on the Institute of Marine Science at Cape Cleveland. The prospective provision of international air traffic facilities at Townsville would provide a further stimulus to growth. In fact, it was specifically in recognition of the burden on the public utilities of Townsville created by such Australian Government initiatives that we decided to provide a grant of $ 1.5m in 1973 towards the cost of constructing stage 1 of the Ross River Dam.

The Department of Northern Development and the Department of Urban and Regional Development have worked in close consultation on this matter, examining all aspects of water supply and demand within the context of our policies in respect of northern development and regional growth centres. The Snowy Mountains Engineering Corporation, at the request of the Department of Northern Development, reviewed the design and cost estimates of the engineering works and an interdisciplinary panel of senior State officers examined the likely environmental impact of stage 2. No adverse environmental consequences were foreshadowed. The Government believes that an adequate supply of water will be a major incentive for future growth in the Townsville area. Water consumption in the tropics is inevitably higher than in most southern cities because of harsher environmental conditions and the requirement of large quantities of water for the maintenance of municipal amenities, such as parks and gardens, recreation areas and street improvements. The provision of adequate water supplies is also an indispensable condition for the location and development of new industrial enterprises on which the longterm growth of Townsville will depend.

I commend this Bill to the House.

Debate (on motion by Mr Adermann) adjourned.

page 1269

JULIUS DAM AGREEMENT BILL 1974

Bill presented by Dr Patterson, and read a first time.

Second Reading

Dr PATTERSON:
Minister for Northern Development and Minister for the Northern Territory · Dawson · ALP

– I move:

The purpose of this Bill is to obtain approval for an agreement which has been negotiated with the Queensland Government under which the Australian Government will provide a loan of $2m during this financial year to the State towards the cost of constructing Julius Dam on the Leichhardt River at a site about 65 kilometres east of Mount Isa. Construction of the dam is to be financed by Mount Isa Mines Ltd, the Mount Isa City Council and the Queensland Government. The estimated cost of the dam is $ 10m with an estimated further cost of $ 1 5.2m to cover pumps and a pipeline supply system. The Queensland Government’s share of the total estimated cost of $25.2m is $7.3m and includes an amount of $3.9m to enable the dam to be built with spare capacity to cater for the expected growth requirements of the area. Julius Dam with a storage capacity of 123,500 megalitres, is being constructed in the Selwyn Ranges some 1,500 kilometres north-west of Brisbane. Rainfall in this region is low, averaging less than 400 millimetres a year and both monthly and annual falls are variable resulting often in severe water shortages over long periods and sometimes in serious floods. The extremely high annual evaporation of 3,230 millimetres leaves an annual deficit of 2,830 millimetres and is the major cause of low yields from water storages.

The whole area is highly mineralised and known reserves of silver, lead and copper ores have been increased as a result of recent exploration, whilst the economic feasibility of developing other mineral deposits has been proved. Mining started at Mount Isa in February 1923 in primitive conditions; transport through the Selwyn Ranges was difficult, and the only water available was from sandy pools in the bed of the Leichhardt River. During its first 50 years of development, water has been an extremely important constraint to progress at Mount Isa. The first water supply was provided by damming Rifle Creek in 1929 and this supply was supplemented by bore water. Later, supplies were further augmented by the construction of Lake Moondarra in 1955, and it is obvious that further development will rely on additional water supplies.

The population of Mount Isa at the 1971 census was 25,200, representing an increase of 8,200 since 1966 at an average annual growth rate of 8½ per cent over the census period. I am sure there is general agreement that people living in arid areas under uncomfortable climatic conditions for many months of the year should have access to assured water supplies for domestic and municipal purposes. The demand for water for mining activities is also expected to increase. Mount Isa Mines is developing a new mine at Hilton some 16 kilometres north of the present workings. Operations at the Hilton mine are expected to commence around 1977-78. Other prospective users of water, such as the phosphate mine at Lady Annie and copper mining at Kajabbi, are likely to begin operations at a later date. Julius Dam is expected to be completed by 1975 and, therefore, there will be some considerable delay between the completion of the dam and the main demand for water.

The loan to the State of Queensland is basically to enable the State to assist in the development of our valuable northern mineral resources. This loan, together with funds provided by Queensland, will ensure a supply of water in anticipation of the expected demand by mining industries. It will ensure that workers and their families will be able to enjoy some of the amenities which people in southern Australia often take for granted. I am, nevertheless, concerned at the high level of water charges which may have to be levied by the Mount Isa Council to meet its share of the dam and distribution works. An offer of a loan of $2m to the State of Queensland was made by the Australian Government in October 1972 and confirmed by this Government with improved terms to ease the burden of repayments until the expected demand for water develops. This new offer has been accepted by the Premier of Queensland under the terms set out in the schedule to this Bill.

The mining industries of northern Australia are making a noteworthy and vitally important contribution to the economy of Australia. They will continue to do so in the future and, in one way or another, we must assure that the heavy burden of costs for water, transport and other basic facilities does not act as a deterrent to those people whose personal contribution is indispensable to the success of the development of our northern resources. I commend this Bill to the House.

Debate (on motion by Mr Katter) adjourned.

page 1270

STATES GRANTS (UNIVERSITIES) BILL 1974

Bill presented by Mr Beazley, and read a first time.

Second Reading

Mr BEAZLEY:
Minister for Education · Fremantle · ALP

– I move:

That the Bill be now read a second time.

This Bill provides grants for universities for a number of purposes- for universities to undertake programs high in the Government’s social and educational purposes. Special grants are to be available to specified universities to increase teaching and research in special education of the handicapped, to establish courses or chairs of community practice associated with community health centres, and to increase the number of social workers in training. We believe these programs will produce sound professional staff and add to the community’s capacity to meet needs in these fields.

Secondly, funds are to be provided to the University of Newcastle to allow for the planning of a new medical school in accordance with the recommendations of the Committee on Medical Schools of the Universities Commission. Thirdly, the Bill provides for an Australian Government contribution towards the costs of acquiring the site of a new university at Campbelltown, New South Wales. Further assistance towards the development of this university will be provided when the Government considers the recommendations of the Universities Commission for the triennium 1976-78.

The Bill provides for administrative matters which have arisen since legislation on grants to universities was passed by the Parliament during the Autumn sittings of 1973. Monash University proposed to speed the introduction of a social work course and special assistance was provided for this purpose. Unfortunately, the University found that it was unable to achieve its objective, and the additional earmarked grant is to be repealed. In the legislation enacted during the 1973 Budget sittings provision was also made in Part IV of the First Schedule to the Act to establish a School of Management Education at the University of New South Wales. Necessary amendments in Parts II and III of the First Schedule to accord with this provision were overlooked. This Bill makes the necessary machinery amendment although this does not represent any increase in the commitment of funds beyond that already intended in the previous legislation.

When the Australian Government assumed full financial responsibility for tertiary education from January 1974 amendment was necessary for proportions of payments to be made by the State governments. In section 8 of the principal Act which is related to student residential accommodation, the word ‘one-twentfth’ was included as the States’ share but this related to total cost and not to the amounts shown in the relevant Schedule attached to the Act which represent the Australian Government contribution. It is necessary to amend the proportion from ‘onetwelfth’ to ‘one-eighth’. The State governments are aware of the need for this particular amendment to the legislation.

As I have already mentioned, the Australian Government assumed full responsibility for the financing of tertiary education from 1 January 1974 and since that time it has become evident that one of the exceptions contained in the existing definition of ‘fees’ in the principal Act relating to fees payable to student organisations requires clarification. Provision has been made in the Bill to provide for this clarification. The purpose of the Bill is to amend the existing States Grants (Universities) Act 1972-73 to make the financial provisions and the necessary machinery and administrative amendments I have mentioned. The measures included in the Bill require a financial commitment of $840,000 for capital expenditure, and $345,000 in 1974 and $563,000 in 1975 for recurrent purposes. I hope the Parliament will enable this Bill to become an Act.

Debate (on motion by Mr Ellicott) adjourned.

page 1271

SEWERAGE AGREEMENTS BILL 1974

Bill presented by Mr Uren, and read a first time.

Second Reading

Mr UREN:
Minister for Urban and Regional Development · Reid · ALP

– I move:

This Bill is designed to provide extra funds for sewerage backlog programs in Victoria, Queensland and Western Australia. Honourable gentlemen will be familiar with the vast national sewerage program introduced by the Australian Government to tackle the backlog in Australian sewerage programs. The Government regards the removal of the sewerage backlog and the ability of State and local government authorities to keep pace with the demand for new services as a yardstick of social progress in Australia.

If we cannot provide the most basic of all services then quite clearly the structure of government in this country has failed the people it purports to serve. We have no cause for pride in the quality of services when millions of gallons of raw sewage is pumped each week into the seas off our coast, bays and inlets and into metropolitan rivers and creeks. A warning is sounded for future generations when we find that our rivers are recording a level of pollution from sewage which is alarmingly high.

The experience of other countries reinforces this message. We do not want to see our oceans and waterways converted into running cesspools in the way that the great rivers of Europe have been polluted. The tragic experience of the Mediterranean and the Rhine, Elbe and Danube Rivers is a reminder to us of what can happen to our own seas, streams and rivers which are still untainted. For these reasons we have stressed the importance of this scheme and our determination to remove the sewerage backlog over the next 8 years. In particular the national sewerage program gives expression to our concern that all new land subdivisions should be given adequate sewerage treatment facilities. We also insist that these treatment facilities should meet standards which safeguard our environment. No house now being built should have to wait for long to be connected to a complete sewerage system.

Beating the sewerage backlog breaks down into 2 parts- connection to a reticulated sewerage system, and overcoming inadequate trunk sewers and treatment standards. About one-sixth of the main urban areas of Australia were unsewered at December 1972 when this Government took office. They are the last figures available. There are many examples of the inadequacy of urban trunk sewerage mains and treatment works. I do not want to list them here. I have given details of them previously. I have touched on their existence to indicate the size of the problem and the level of capital spending that will be required to overcome them. They reinforce the point that these great problems will not be solved without heavy capital spending. Spending on sewerage works soaks up an enormous amount of capital, both for the expansion of services to meet growing populations and to chop out the backlog in services which now exists. It means that the States and local government cannot tackle the backlog and at the same time keep up with new services without strong support from the Australian Government. Without that support it is not possible, and it has not been possible in the past Unfortunately the sad thing was that previous Australian Governments would not become involved in the problems of urban areas.

Provision of sewerage is often made difficult because of the existence of hilly, rocky and swampy country in many of the new areas developed around our cities. Septic tanks can provide a substitute in sparsely settled and relatively flat areas but it is at best a poor substitute. In fact in some cases, such as on the Gold Coast, a septic tank system in times of flood may become more dangerous than a system without septic tanks. In densely settled areas which have high water tables or are rocky or swampy the septic tank is no substitute for reticulated sewerage. We concede these difficulties but we are determined to overcome them and to provide the strongest possible lead for State and local government authorities to give the Australian people proper sewerage.

It is appalling to have to record that the sewerage from 400,000 people in Brisbane is still discharged untreated into Moreton Bay at the mouth of the Brisbane River. The Melbourne Press in the past year has been studded with report of high levels of pollution from sewage on the beaches and bays of Melbourne. Quite often in Melbourne heavy rains force overflows of sewage into the city’s stormwater drainage systems. This noxious waste is then transmitted through the suburbs of Melbourne. Most metropolitan streams in Australia record levels of E.coli which are completely unacceptable to this Government. These are examples of the social evils the extra assistance given by this Bill is designed to remove from our cities and countryside.

The Sewerage Agreements Act 1973 appropriated $30m of loan funds at the long term bond rate to the States for sewerage backlog works for 1973-74. This was in this year only. In the new program which will be announced tonight will be a different arrangement which will be explained by the Treasurer (Mr Crean). I stress that this is additional to the normal allocation of loan money each year to the States for sewerage works. This program was tailored to fit the ability of the State sewerage authorities to speed up their works programs after this allocation was made. With one exception, the initial allocations to the States in 1973-74 have been spent. The total program for 1973-74 included 81 reticulation projects, 35 main, sub-main and carrier sewer projects, 6 pumping stations and 10 treatment plants. In the course of the 1973-74 financial year, it became clear that Victoria, Queensland and Western Australia needed further financial assistance. This was necessary to keep up the existing rate of progress of works throughout the whole of the year. It is important that the momentum built up by this program should be maintained so that the sewerage backlog in the main urban areas disappears in the shortest possible time. The Government’s advisers reviewed the programs and we decided on agreements with the 3 State Governments for the extra works and extra moneys. These agreements will be effective once this Bill is passed. But for the double dissolution it would have been introduced in the autumn session of Parliament.

Turning to the assistance sought by the States, Victoria asked for $3.95m, Queensland $2m, and Western Australia $3m. We have agreed to these allocations except for Queensland, where $lm will be made available. This means that the total allocation of financial assistance for sewerage backlog in 1973-74- the first year of administration of this Government- will be $37.95m. It will be distributed between the States in this way: New South Wales, $ 11.2m; Victoria, $ 13.25m; Queensland, $4.1m; South Australia, $1.6m; Western Australia, $6.8m; and Tasmania, $lm. The extra money will be made available on the same terms and conditions as in the Sewerage Agreements Act 1973. We have carefully assessed the impact of these programs on manpower and material resources. Most of the works have already been completed and therefore will involve no significant pressure on resources. Where works will not be completed for some months we have ensured that our allocations will not impose a strain on resources of both men and materials.

I turn now to the programs for each of the States. The program in Victoria is important because good progress has already been made and the extra money will enable greater inroads into the sewerage backlog to be made. I am convinced that the additional funds will accelerate the strong drive the Melbourne authorities have started against pollution in metropolitan streams and along the bay-side beaches. It is only in such a co-operative manner that we can solve the problem

In Queensland, the extra assistance will be concentrated on projects designed to remove the backlog of poor sewerage services in Brisbane. It will include the start of the Luggage Point treatment plant which will treat sewage from the main sewerage area of Brisbane to comply with Water Quality Council standards. This will bring important benefits to the environment in central Brisbane and in the outer suburbs of the city.

In Western Australia, the extra assistance will mean that existing programs will be maintained at peak level. Without this assistance, the Perth Metropolitan Water Board would have to cut back its accelerated works program, and this would mean a reduction in contract staff. With regard to longer term programs, in the Budget session the Government will announce details of the form and level of finance to be provided. We have to solve these problems together. It has to be a co-operative effort between the Australian and State governments and local authorities. We intend to set out to work together in a cooperative way in what we call a spirit of cooperative federalism to try to solve these problems. The level of financial assistance under this Bill now before the House has been taken into account in preparing the long-term program. I ask honourable members to note that the form and level of finance proposed under the longterm program cannot be anticipated from the financial arrangements under this Bill.

In summary, this Bill provides extra amounts of up to $3m to Western Australia, $3. 95m to Victoria and $lm to Queensland in the 1974-75 fiscal year as part of the program to cut out the sewerage backlog. The extra money will allow the level of activity reached under the existing accelerated program to be maintained. The funds will be provided under the same terms and conditions as in the Sewerage Agreements Act of 1973, a matter which I drew to the attention of the House earlier. This arrangement applied to that year only and a new arrangement will be announced tonight by the Treasurer. This was the first real drive of an Australian government to work together with the States and local authorities to overtake the backlog of sewerage, to protect the environment and to give every person living in an urban community the right to sewerage and better environmental conditions. I commend the Bill to the House.

Debate (on motion by Mr Peacock) adjourned.

page 1273

PAPUA NEW GUINEA BILL 1974

Bill presented by Mr Morrison, and read a first time.

Second Reading

Mr MORRISON:
Minister for Science and Minister Assisting the Minister for Foreign Affairs in matters relating to Papua New Guinea · St George · ALP

– I move:

That the Bill be now read a second time.

As this Bill and the Petroleum (Submerged Lands) Bill 1 974 which I will be introducing subsequently are interrelated, I propose with the indulgence of the House to make a short statement covering both Bills.

Debate (on motion by Mr Peacock) adjourned.

page 1273

PETROLEUM (SUBMERGED LANDS) BILL 1974

Bill presented by Mr Morrison, and read a first time.

Second Reading

Mr MORRISON:
Minister for Science and Minister Assisting the Minister for Foreign Affairs in matters relating to Papua New Guinea · St George · ALP

– I move:

That the Bill be now read a second time.

The purpose of the Petroleum (Submerged Lands) Bill 1974 and the Papua New Guinea Bill 1974 is to give effect to a request by the Government of Papua New Guinea that the Papua New Guinea House of Assembly be given authority to legislate with respect to mining for petroleum and other minerals in the territorial sea and the continental shelf within the adjacent areas of Papua New Guinea as defined in the Petroleum (Submerged Lands) Act 1967-1973. With the advent of self government in Papua New Guinea on 1 December 1973 authority over all functions of government passed to the control of Papua New Guinea with the exception of a small number of functions which were reserved to Australia- the most important of these being defence and foreign relations.

Authority over the function of off-shore mining passed to Papua New Guinea and Papua New Guinea had the right, consistently with self government, to legislate in regard to offshore rnining. As an interim measure, until the necessary legislation could be enacted, the Minister for Foreign Affairs, who is designated authority in respect of the adjacent areas of Papua New Guinea, under the Petroleum (Submerged Lands) Act, delegated his authority to the Papua New Guinea Minister for Mines and Energy and certain Papua New Guinea Government officials.

The Australian Government agreed to permit Papua New Guinea to enact its own legislation subject to 2 conditions. These are that:

  1. It will not, prior to independence, introduce legislation purporting to regulate off-shore mining in areas beyond the outer limits of the continental shelf within the meaning of the 1958 Convention on the Continental Shelf nor will it act inconsistently with any international convention relating to the law of the sea to which Australia is a party;
  2. Adequate safeguards as to the environment should be applied during the exploration stage, and if oil or gas should be discovered within the ‘adjacent areas’, it would consult with the Australian Government and seek the advice of an independent authority to ensure that commercial exploitation would not commence until the environment was adequately safeguarded.

The Papua New Guinea Chief Minister has agreed to these 2 conditions. He has also indicated that the Papua New Guinea Government shares Australia’s concern to protect the environment.

Taking these Bills in turn, the Petroleum (Submerged Lands) Bill provides for the repeal from a date to be proclaimed of the provisions of the principal Act that extend to Papua New Guinea. This date will be the date of commencement of Papua New Guinea’s own off-shore legislation. Clause 4 amends section 7 of the principal Act by ceasing its extension to Papua New Guinea and clause 5 omits reference to the Australian Minister as the designated authority in respect of the adjacent areas of Papua New Guinea. Clause 6 repeals the section of the principal Act which deals with the payment of fees, royalties, etc., to Papua New Guinea and provides that any moneys received by Australia before the date of commencement of this Act are to be paid to Papua New Guinea. Clause 8 removes the description of the adjacent areas of Papua New Guinea from the second schedule to the principal Act.

The Papua New Guinea Bill puts beyond doubt the authority of the House of Assembly to legislate with regard to off-shoremining. Clause 3 of this Bill inserts a new section in the principal

Act to clarify the authority of the House of Assembly to legislate in the offshore area, as defined in the new section, and provides that such authority shall not be construed as limiting by implication any other power of the House of Assembly to make laws under the principal Act. I draw to the attention of honourable members the fact that Papua New Guinea’s authority to legislate with regard to off-shore mining is confined to the territorial sea and the continental shelf within the adjacent areas of Papua New Guinea and that Papua New Guinea has agreed to conform to Australia’s international obligations in regard to the law of the sea conventions.

Although the function of Papua New Guinea ‘s foreign relations is reserved to Australia, the policy of the Australian Government has been to involve fully Papua New Guinea and to exercise that function only after the fullest consultation with and advice from the Papua New Guinea Government. Consistent with this policy Australia has encouraged Papua New Guinea to take its place in the international community and one example of Papua New Guinea’s increasing involvement in this community was its participation in the recent Law of the Sea Conference in Caracas.

The Bills I am introducing are a further step in the devolution of authority to Papua New Guinea so that when independence comes there will not be one aspect of government with which Papua New Guinea will not be familiar and experienced. I commend the Bill to honourable members.

Debate (on motion by Mr Peacock) adjourned.

Sitting suspended from 6.13 to 8 p.m.

page 1274

APPROPRIATION BILL (No. 1) 1974-75

Message from the Governor-General recom mending appropriation for proposed expenditure announced.

Bill presented by Mr Crean, and read a first time.

Second Reading (Budget Speech)

Mr CREAN:
Treasurer · Melbourne Ports · ALP

That the Bill be now read a second time.

In doing so, I present the Budget for 1 974-75.

The Government has twice in less than two years been elected to carry out programs of social reform and progress.

The Budget proposals I am announcing tonight are designed to advance our programs and to make Australia a fairer society.

page 1275

THE BUDGET SETTING

Due to the interruption of the normal business of government and Parliament caused by the dissolution of both Houses, the Budget is being presented later than usual.

Furthermore, it has been framed within the context of an economy subjected to exceptional strains.

Mr CREAN:
ALP

– I will say it again: An economy subjected to exceptional strains. We share with all our major trading partners problems of economic management unparalleled in modern times. Yet it must be emphasised that these problems flow from Australia’s basic strength and real prosperity. In the past year- and those honourable members who have studied the White Paper on national income can read it for themselves- gross domestic product increased in real terms by 5% per cent. Civilian employment rose by a record 218,000. Incomes rose strongly in both real and dollar terms.

Partly because of this increase in incomes, price increases have been large and widespread. Until recently, we have experienced severe shortages and delays in the supply of a wide range of goods and materials and a disturbingly high incidence of industrial disputes.

The Government acted decisively to ease the excess pressures on the economy prevalent during most of 1973-74. Firm action was taken through monetary policy to moderate excessive demands and through exchange rate adjustments and tariff reductions to increase supplies. In the event, nearly one-half of the increase in demand was satisfied by the increase in imports resulting from our external policies.

These actions have achieved their objective. Demand pressures in the private sector have abated in recent months. After strong growth in the first half of 1973-74, capital spending by business declined slightly in real terms in the second half of the year. Investment in new dwellings, which had been far outstripping the growth in building resources, is now more in line with the supplies available. Though remaining reasonably buoyant, consumer spending is now a less dominant expansionary force than it was during much of 1 973-74.

The abatement in demand pressures is evidenced also in the labour market. Unemployment has increased and overtime working has diminished.

Although demand pressures are being contained, powerful cost pressures have been unleashed which threaten further unsettling price increases. In that connection I mention that the Government is exploring a tax penalty mechanism by which wage and salary increases beyond an established norm might be excluded from assessable costs for the assessment of company income tax.

The conventional response to inflation has relied almost entirely on the creation of mass unemployment. Those who advocate such a course in present conditions are unable to say what level of unemployment would markedly reduce inflation. The Government is not prepared deliberately to create a level of 4 or 5 per cent, or perhaps even higher unemployment.

The Government is convinced that the best course is to attack the cost price spiral directly. We are pursuing this course in discussions with the State Governments arising from the recent special conference with Premiers. We have also engaged in discussions with unions and employers, particularly in the context of the Moore Conference. This form of action depends upon widespread and unusual co-operation. To rely on unemployment to reduce cost pressures would inhibit that co-operation and could destroy the Government’s right to claim it. The Government will not close off its options until the possibilities of co-operation have been given a proper test.

However, decisions taken in the Budget context remain important in this overall strategy. We must maintain control over total demand to prevent excessive demand pressures emerging again. The expansion in the public sector contained in this Budget is designed to take up the slack emerging in the private sector.

The Government’s appeal for restraint on wages and prices will, I believe, be reinforced by the decisions, particularly on the tax side, which I shall shortly announce. In making their wage claims, employees should recognise that the Government expects the principal burden of restraint to fall on upper income groups, particularly through the impact on profits of the operations of the Prices Justfication Tribunal and by the substantial redistribution of incomes which will arise from this Budget, particularly from the amendments to the income tax system and the new provisions for the taxation of property incomes and capital gains. The possibility of restraint from all sections of the community will be enhanced by the decisions I will announce designed to reduce the burdens on and increase the benefits for wage earners and particularly low and single income families.

The Government will continue to be flexible in its use of policy instruments to meet any difficulties which emerge- as illustrated by the action earlier this month to enable the Savings Banks to increase their lending for housing, and by the recently announced decision to institute a Regional Employment Development Scheme. Should the need arise, we stand ready during the year to take action on the expenditure or revenue side of the Budget to give a quick stimulus to demand and employment.

Crucial as the fight against inflation is, it cannot be made the sole objective of Government policy. This Government is committed to the program of social reform to improve the position of the less privileged groups in our society and to maintain employment opportunities. We intend to pursue those programs and objectives without significant increase in the public service which will be held to the increase in operative staff of 1 per cent previously announced.

The Government’s overriding objective is to get on with our various initiatives in the fields of education, health, social welfare and urban improvement. The relatively subdued conditions in prospect on the private sector provide the first real opportunity we have had to transfer resources to the public sector.

It is against this background that we have budgeted for substantial increases in expenditure on our major programs of reform this year.

page 1276

OUTLAYS

Total Budget outlays in 1974-75 are estimated at $16,274 million an increase over actual outlays in 1973-74 of $3,980 million or 32.4 per cent.

Opposition supporters- Oh!

Mr CREAN:
ALP

– -Well honourable members opposite can tell us later where they would cut it down.

Mr Peacock:

– That is what you are charged to do.

Mr SPEAKER:

-Order! The honourable member for Kooyong will remain silent.

Mr Peacock:

– There is very severe provocation with that sort of stuff.

Mr CREAN:

-Meanwhile, the honorable member for Kooyong and others can study the details in Statement No. 3.

I now briefly outline the Government’s expenditure proposals for 1974-75; additional information will, as appropriate, be provided by the responsible Ministers.

page 1276

EDUCATION

Education remains one of the Government’s highest priorities. Last year, Australian Government expenditure on education almost doubled. For 1974-75, total outlays on education are estimated at $ 1,535 million an increase of 78 per cent on 1973-74.

The increase is partly due to the full impact of major new programs introduced by the Government at the beginning of 1974.

Mr CREAN:
ALP

– And inflation- but substance as well. These include the new programs of expenditure on primary and secondary schools being administered by the Schools Commission; the Government’s undertaking of total financial reponsibility for tertiary education throughout Australia; the abolition of fees for tertiary and technical education; and the new student assistance measures.

Our expenditure on schools will increase from $234 million in the last financial year to $555 million in 1974-75, an increase of 137 per cent. On universities and colleges of advanced education, expenditure will rise from $524 million to $818 million, a 56 per cent increase.

This Budget provides for important new measures in education to be introduced in 1974-75.

A major new initiative will be undertaken in the field of technical and further education, based on the broad program recommended by the Kangan Committee. Subject to the understanding that the States will not reduce the level of their own activities in technical education, we expect to spend $96.5 million in the States on this program in two years, and have provided $49.1 million for this purpose in 1974-75. This will cover expenditure on land and buildings, including residential faculties for students, and on equipment and minor works, assistance with general recurrent expenditure, and for specific purposes such as in-service teacher education and library development. The Minister for Education will be providing details of this program.

The Government has accepted the recommendations of the Schools Commission that extra funds should be allocated along the lines suggested in the Karmel Report to ensure that the impact of Schools Commission grants, and of grants under earlier programs for school science arid library facilities, is not eroded by cost increases. An amount of about $78 million will be available for this purpose during the remainder of the 1974 school year and in the 1975 school year; $48.5 million of this is included in the 1974-75 Budget. Previously, we had introduced procedures to supplement grants to universities and colleges of advanced education for the same purpose. Provision for these supplementary grants has been made for the first time in the 1974-75 Budget, at a cost of $39.2 million.

Changes to existing schemes of assistance to students at secondary and tertiary levels are estimated to cost an additional $7.2 million in 1974-75. These will permit rates of allowances and means tests to be adjusted to reflect movement in costs.

Details of other initiatives in education to be introduced in 1974-75 will be announced by the Minister for Education. care and education of young children

The Government has decided to proceed with its full-scale program for the care and education of young children. We propose a fully integrated approach to the needs of childhood, embracing education, health and care services. An amount of $75 million has been provided in the Budget to enable a start to be made on the program by no later than 1 January 1975, and to meet existing commitments.

A Children’s Commission will be established to assume responsibility for administering all existing commitments in this area and for developing the new program. Meanwhile, an interim Children’s Committee will be set up.

Details of the Government’s decisions on the care and education of young children will be the subject of a statement by the Minister Assisting the Prime Minister.

page 1277

HEALTH

A Development Program for Australian Hospitals

Following consideration of the Hospitals and Health Services Commission report on Hospitals in Australia, tabled in Parliament on 10 April, the Government has decided to implement a five-year program of capital assistance for the provision, expansion and modernisation of public hospital and other health institutional facilities in the States. The amount provided for 1974-75 is $28 million. To meet urgent needs for additional hospitals, arrangements will be made to acquire a site in each of Sydney, Melbourne and Brisbane for the construction of an Australian Government hospital.

Medical and Surgical Aids and Appliances

The Government has recognised the need for assistance in the provision of medical and surgical aids and appliances. Currently, artificial limbs and, in certain cases, hearing aids are provided free of charge. It is proposed to widen the assistance given in this field by providing free of charge, to those who need them, stoma appliances and the equipment and supplies needed for home dialysis. It is intended that stoma appliances will be distributed through hospitals and stoma associations. Home dialysis requirements will be made available through hospital dialysis and transplantation centres.

Royal Flying Doctor Service

The Australian Government will increase capital grants and operational subsidies for the Royal Flying Doctor Service. Financial assistance for the three years commencing 1 July 1974 will comprise a capital subsidy of up to $800,000 and an operational subsidy of up to $2.1 million. The estimated cost of the additional assistance in 1974-75 is $327,000.

Nursing Homes

The Government is continuing its efforts to improve the position of patients in nursing homes. Nursing home benefits were increased from 1 August at an additional cost in 1 974-75 of $24.6 million.

In addition, it is proposed to amend the National Health Act to authorise the Minister to enter into agreements with religious, charitable and other non-profit organisations conducting nursing homes, under which the Government will meet the deficits incurred in running the homes. It is planned to introduce this arrangement in January next. The cost in 1974-75 is estimated at $ 1.8 million.

The Government has approved a special grant of $1.2 million, on a dollar- for-dollar basis, to Queensland for the erection of Stage 2 of the public nursing home complex at Wynnum. $300,000 has been provided for 1974-75.

Home Nursing

We propose to increase, with effect from 1 October 1 974, the existing subsidy to approved organisations providing home nursing services. For organisations established before September 1956, the annual Australian Government payment for each nurse who attracts subsidy will be increased from $4,700 to $6,200. For organisations established after that date, the annual subsidy for each nurse employed will be increased from $2,350 to $3,100. As at present, the Australian Government subsidy to any organisation will not exceed that paid to the organisation by a State. The increase m the subsidy is expected to cost $6 13,000 in 1974-75.

National Drug Education Program

The Government intends to continue the National Drug Education Program and for this purpose will provide $750,000 in 1974-75. Continuing support will be provided for the program during 1975-76 and 1976-77.

page 1278

SOCIAL SECURITY AND WELFARE

The Government is pressing on with its commitment to restore Australia to a position of leadership in the provision of welfare services.

Social Security Benefit Rates

Because this year’s Budget is late, all social service pensions and benefits have already been increased. The standard (or single) rate was increased by $5 a week and the combined married rate by $6 a week. The standard rate of pension represents almost 25 per cent of seasonally adjusted average weekly earnings for the June quarter 1974. Pension rates will be further reviewed in Autumn 1975.

Additional pensions and benefits payable in respect of dependent children, including student children, are to be increased by 50 cents to $5.50 a week.

The means-tested supplementary assistance and supplementary allowance payable to pensioners and beneficiaries who pay rent are to be increased by $1 to $5 a week. The amount of supplementary assistance payable is not to exceed actual rent paid.

Orphans pension which v/as introduced by this Government last year is to be increased by $1 to $11 a week.

Abolition of the Means Test

As I indicated in my statement to the House on 23 July, the Government will be proceeding with the second step in the abolition of the means test -for residentially qualified persons aged 70 to 74 years- to take effect next April.

Australian Assistance Plan

Last year a pilot program provided assistance for 35 Regional Councils for Social Development to establish social planning structures at a regional level. Further impetus is now to be given to the program. Initiating grants will be provided in regions currently not assisted. Administration grants will be increased in the regions already receiving assistance and six more regional councils will be given access to capitation grants to assist local social welfare services.

Dwellings for Pensioners

The States Grants (Dwellings for Aged Pensioners) Act 1969, provided $25 million for nonrepayable interest-free grants to the States over the five years terminating in 1973-74. These grants were for the construction of dwellings to be let to single persons who were receiving an age or Service pension and who were eligible for supplementary assistance. We will now provide an amount of $30 million over the three years from 1974-75, doubling the annual grant to $10 million. The scheme will be widened to embrace the construction of dwellings to be let to single invalid and Class B widow pensioners and single Service pensioners who are permanently unemployable or suffering from tuberculosis.

Home Care for the Aged

It is the Government’s intention that the rate of capital subsidy under the Aged Persons Homes Act, now $2 to $1, will be increased to $4 to $1 from 1 January 1975.

The personal care subsidy payable to organisations providing personal care services for the aged in approved hostel accommodation will be increased from $ 12 to $ 1 5 a week.

The basic rate of subsidy paid to ‘mealsonwheels’ services will be increased from 20 cents to 25 cents a meal. The increased subsidy will be payable from 1 October 1974 and will apply to meals delivered since 1 July 1974.

Assistance to the Handicapped

Handicapped children’s benefit payable to organisations is to be increased by 50 cents to $3.50 a day.

We propose to introduce a Handicapped Child’s Allowance of $10 a week. It is to be payable to parents and guardians in respect of a child under 16 years who is cared for at home and who, because of the severity of the handicap, is in need of constant care and attention.

National Family Planning Program

The Government has decided to increase grants to national family planning organisations by $75,000 to $425,000 a year. We will also initiate further measures to encourage family planning and provide advisory facilities to those who have previously lacked access to family planning advice. An amount of $700,000 has been included in the Budget for the provision of facilities and for the training of medical personnel.

Structural Adjustment Assistance

An amount of $ 1 1 . 8 million is provided in the Budget to assist employees displaced as a direct result of Government decisions designed to bring about significant structural changes in industry that are in the national interest. Within specified limits, income maintenance payments will be made available to individuals affected by these decisions.

page 1279

COMPENSATION AND REHABILITATION

We have endorsed in principle the compensation scheme contained in the Report of the National Committee of Inquiry into Compensation and Rehabilitation in Australia (the Woodhouse Report) and the main enabling legislation will be introduced in the Budget sittings. The Bill will provide for a phased introduction of the scheme and, following detailed examination of the scheme by the Government and others, amendments may be made to the Act before its implementation. The only costs in 1974-75 will be for the payment of staff and consultants to plan the operation of the scheme.

page 1279

REPATRIATION BENEFITS

There will be further substantial increases in Repatriation benefits.

The Special Rate pension, or its equivalent, will be increased by $4.00 a week to $64. 10 during the Budget sittings and will be further increased by $4.00 a week during the Autumn of 1975. The maximum General Rate war pension will be increased by $3.00 a week to $25.00 during the Budget sittings and further increased by $3.00 a week during the Autumn. There will be increases in the Domestic Allowance payable to most war widows and in most other pensions and allowances paid under Repatriation legislation. The full details will be announced by the Minister for Repatriation and Compensation.

In addition, we have decided to introduce some new benefits in the Repatriation field.

Free medical and hospital treatment for any condition will be provided for all Australian exservicemen and women who were interned as prisoners of war. All ex-service personnel, irrespective of whether they had service in a theatre of war, who suffer from malignant cancer, will be provided with any treatment necessary for that condition. These benefits will be introduced during the Budget sittings.

Further benefits will be introduced from the Autumn of 1975. The means test on service pensions will be abolished for those aged 70 to 74 years. A further 25 per cent of all war pension payments will be disregarded as income for service pension means test purposes. Ex-service personnel who had war-time service in the Defence Forces of other countries of the British Commonwealth and who are now residing in Australia, and have done so for at least ten years, will be eligible to apply for service pensions.

page 1279

ABORIGINAL ADVANCEMENT

The Government accorded a high priority to Aboriginal affairs in its Budget allocations in 1973- 74. We propose a further substantial expansion of activity this year. The Budget provides for an increase of $64.9 million in outlays on Aboriginal advancement programs in 1974- 75, to a total of $163.6 million. This provision will ensure that initiatives taken since December 1972 will be consolidated and developed for the benefit of the Aboriginal community.

page 1279

HOUSING

Welfare Housing

At the Premiers’ Conference in June, we agreed to advance $235 million to the States for welfare housing purposes in 1974-75. Taking into account that $25 million of the 1973-74 advances was not spent by the States last year, this would allow for an increase in expenditure this year of $67 million, or 34 per cent. Nevertheless, we stand ready to consult with the States on the provision of additional advances in the light of developments in the housing industry, the availability of resources for housing construction, and the ability of the States to put further funds for welfare housing to productive use. If circumstances warrrant, we will be proposing that an increased proportion of advances made to the States under the Housing Agreement be disbursed through the Home Builders’ Accounts to assist private home ownership for persons of low and moderate income.

Australian Housing Corporation

The Government proposes to introduce as soon as possible legislation to establish an Australian Housing Corporation to undertake all of those housing functions for which the Australian Government has Constitutional power. This will include direct lending by the Corporation to families for housing. The sum of $25m is being provided to enable the Corporation to undertake those housing functions which are not provided for under other appropriations. Details will be announced by the Minister for Housing and Construction.

Defence Service Homes

We propose to improve significantly the Defence Service Homes Scheme. Details will be announced by the Minister for Housing and Construction. The proposals include an increase in the maximum loan from $12,000 to $15,000, liberalization of eligibility conditions, and limited provisions for the transfer of a loan to another property. We have also reviewed the interest rate charged on new loans; the present rate of 3% per cent per annum will be retained on existing loans and new loans up to $12,000, but the interest rate on future loans on the amount exceeding $12,000 will be 2 per cent below the most favourable rate available from the Commonwealth Savings Bank (at present 9V4 per cent), with provision for relief for pensioners in circumstances of hardship.

The provision for Defence Service Homes will be increased to $ 1 1 5 million, or $ 1 3 million more than the amount provided last year.

Housing in the Territories

The Budget provides $65 million for housing in the Australian Capital Territory and the Northern Territory in 1 974-75, $ 14 million more than expenditure last year. This provision allows for additional funds for the Northern Territory Housing Commission, whose building program for 1973-74 was seriously interrupted by the abnormal wet season in the Territory.

page 1280

URBAN AND REGIONAL DEVELOPMENT

One of the most significant initiatives of this Government has been the major effort to improve the standards of the urban environment in our cities and regions, to establish attractive alternatives to living in the major cities, and to arrest and reverse the decay of the established areas of our cities.

This year we will be spending about $390 million on such programs. A comprehensive statement of outlays on urban and regional development is given in the document on that subject being tabled by the Minister for Urban and Regional Development with the Budget papers.

Canberra

Apart from being the national capital, Canberra is one of the most rapidly expanding urban areas in Australia. In 1974-75, $38.8 million will be spent in Canberra on acquiring and servicing land for residential, business and community uses.

Growth Centres

In partnership with the New South Wales and Victorian Governments we have, in the past year, established the Albury-Wodonga Development Corporation. This Budget provides an amount of $40 million for Albury-Wodonga, the major new growth centre initiative in South East Australia. A further $37.4 million has been provided for the establishment of other growth centres including Monarto, Geelong and Bathurst-Orange.

Land Commission

Last year we made a major commitment towards the establishment of Land Commissions designed to provide Australian families with land at fair prices. Subsequently, the first Land Commission was established in South Australia. The Victorian, New South Wales and Tasmanian Governments have accepted the principles of this program. For 1974-75, we are providing $54.5 million for the purchase and development of land in the States.

Area Improvement

Pilot schemes of area improvement have been commenced in the western sectors of Sydney and Melbourne. In addition, assistance to increase the standards of services available in 11 new regions will be commenced during 1974-75. An amount of $14.1 million has been provided for this program.

Urban Rehabilitation

An amount of $ 1 7.5 million has been spent on the purchase of 47 acres of residential land at Glebe, New South Wales, and a further $1 million has been provided to commence the rehabilitation of that area and to improve and increase its housing stock.

Sewerage

During 1973-74 we commenced a program of assistance to the States to eliminate the backlog of sewerage services. That program will be accelerated this year and the Budget provides an amount of $105 million.

Last year the program was confined to the major cities. This year we are expanding it to cover provincial cities in the population range 20,000 to 60,000.

PROTECTION OF THE ENVIRONMENT

.The Government supports a wide range of activities in the field of environmental protection and conservation.

Among our new initiatives in this area, the Budget provides $250,000 for the first stage of a National Air Monitoring Program and for studies leading to the establishment of a Baseline Monitoring Station as part of Australia’s contribution to the United Nations Environment Program. $100,000 is being provided for a campaign to increase public environmental awareness.

page 1281

CULTURE AND RECREATION

This Budget provides for the consolidation of the progress made last year towards meeting a wide range of cultural and recreational needs.

Assistance for the Arts

The Budget provision for programs of the Australian Council for the Arts will be increased by $6 million of $20 million. In addition, $637,000 is provided for payments to authors and publishers under the Public Lending Right Scheme.

The Film and Television School

An amount of $2.8 million is provided for The Film and Television School, reflecting the commencement, in 1975, of the School’s full-time operation.

Broadcasting Services

An amount of $98 million, or $ 16 million more than in 1973-74, has been provided for operational expenditure by the Australian Broadcasting Commission. A further $14 million has been provided for expenditure on capital equipment, mainly that required for the introduction of colour television.

International Women’s Year 1975 has been designated by the United Nations as International Women’s Year. The Government has allocated $2 million for relevant activities during 1974-75 by both Government departments and nongovernmental organisations.

Australian Library Based Information System

The Government has agreed to the allocation of an additional $1,025,000 over the next two financial years to enable the National Library to undertake a program of extensive consultations and studies on the possible development of an Australian Library Based Information System.

National Estate

There has been in the past an undue emphasis on the concept of uncontrolled development; this has left much to do in identifying, conserving and enhancing the National Estate. The Budget provides an amount of $8 million for grants to the States and to National Trusts, and for expenditure in the Territories, on the advice of an Interim Advisory Committee on the National Estate.

Provision is being made for expenditure of $381,000 to commence a National Parks and Wildlife Research Program, including the commencement of an ecological survey of Australia and of flora and fauna research and surveys. $9 million will be provided to assist the States in the acquisition of land for nature conservation purposes.

Recreation, Sport and Leisure

The Government will expand its program of assistance to facilitate and encourage beneficial leisure-time activities. These new measures will encourage participation in physical recreation, increase assistance for sport and assist other forms of recreation activities. Expenditure on sport, youth and recreation activities is expected to reach $2.5 million in 1974-75.

The Budget provides $4.5 million for expenditure during 1974-75 on community leisure facilities.

The Government’s initiatives in community recreation have shown the need for adequately trained recreation leaders and for recreation research. A provision of $ 1 5 5 ,000 has been made to accelerate the development of courses in community recreation at the associate and graduate diploma levels in colleges of advanced education. $250,000 has been provided in the Budget for a research program into all facets of community recreation. Provision has also been made for the support of innovatory programs in community recreation.

page 1281

QUESTION

DEFENCE

The amalgamation of the former Defence and Service Departments has enabled the appropriations this year for the three Armed Services to be brought together under a single Department of Defence

Mr McLEAY:

– By how much have you chopped that back?

Mr CREAN:
ALP

-Well, we have increased it. The provision for defence outlays in 1974-75, including defence-related activities of the Department of Manufacturing Industry and other departments, is $1,498.7 million compared with actual outlays of $1,334.1 million in 1973-74. This provision for defence purposes enables the Government to continue its policy of maintaining Defence Forces which, in conformity with the present strategic outlook, sustain a proper level of defence capability and potential for future expansion.

The Government is proceeding with the four new major equipment projects for the Armed Forces announced in April this year, with a total commitment of some $330 million to be spread mainly over the next eight years. These projects are: eight Long Range Maritime Patrol aircraft for the RAAF, fifty-three modern medium tanks and forty-five Fire Support Vehicles for the Army, and two new destroyers for the RAN. In addition, an extensive program for the refitting and modernisation of RAN surface ships and submarines is under way. Meanwhile, production is proceeding against the orders of previous years; this involves substantial expenditure on items such as two additional Oberon submarines and ten Westland Sea King helicopters.

New budgetary arrangements for providing financial assistance to Papua New Guinea in respect of defence are being introduced with effect from 1 December 1974. An amount of $12.5 million is being provided for defence cooperation with, and defence financial assistance to, Papua New Guinea from that date. Estimated expenditure on defence in Papua New Guinea this year, prior to 1 December, is $ 10.2 million.

Expenditure on continuing defence cooperation with a number of other friendly countries in the region of immediate strategic interest to Australia is estimated as $ 12 million.

The 1974-75 Defence Program provides for reductions in civilian support manpower additional to those achieved in 1973-74. These further reductions are made possible by the rationalisation of activities.

It is intended that legislation will be brought down later this year to enable the reorganisation of the Department of Defence to be put into full effect.

My colleague, the Minister for Defence, will be making a more detailed statement on defence matters at a later time.

page 1282

ECONOMIC SERVICES

I turn now to the area of economic services, including assistance to industry and the community generally.

page 1282

TRANSPORT AND COMMUNICATION

Post Office

The amount to be provided from the Budget to help finance the Post Office’s capital program is $385 million, the same as in 1973-74. This is in accordance with the Prime Minister’s announcement at the Premiers’ Conference on 7 June 1974. The remaining finance for the capital program will come from internal resources.

As the Prime Minister also announced at the Premiers’ Conference, it is proposed to increase Post Office charges substantially. This is necessary to provide additional revenue in 1974-75 and to avoid substantial losses on the provision of Post Office services. The Government therefore proposes to introduce legislation to give effect, from 1 October 1974, to increases in postal and telecommunication charges similar to those rejected by the Senate in July. However, because of the delay in introduction of the higher charges resulting from the Senate’s obstructionism, and the consequential loss of revenue, it has been necessary to review some of the increases previously proposed. The basic postage rate will rise to 10 cents, instead of the 9 cents that would have been sufficient if the Senate had permitted introduction of the higher charges from 1 August. The business telephone rental will be increased to $85 a year, instead of $75 as proposed earlier.

Further details will be announced by the PostmasterGeneral.

Civil Aviation

In accordance with the policy announced last year of recovering 80 per cent of the cost of airport and airways facilities by 1977-78, it is proposed to increase air navigation charges from 1 December 1974 by 15 per cent, the maximum permissible under the Airlines Agreement negotiated with the two major domestic airlines last October. Charges to general aviation will be increased by an additional 50 per cent, but the rebate for aircraft not based on government aerodromes will be increased from 33 Vs per cent to 50 per cent. The additional revenue in 1974-75 is estimated at $3.9 million.

The Department of Transport provides a wide variety of services to the aviation industry for which little or no charge is made. The Government sees no reason why these costs should not also be recovered. Accordingly, we propose that charges for these services should be introduced in 1974-75 and increased progressively so as to achieve full recovery by 1 976-77.

Within the framework of the cost recovery policy, the Government has decided to proceed in 1974-75 with the construction of a new international terminal costing $4.2 million at Brisbane airport for completion in 1975, a new terminal for Hobart estimated to cost $1.3 million and extensions to the Sydney international terminal at a cost of $2.7 million.

Roads

Following the expiry of the Commonwealth Aid Roads Act 1 969, the Australian Government intends to provide $1,126 million to the States for roads purposes over the next three years. A major new initiative will be the allocation of $400 million of this to meet the full cost of approved construction works and maintenance in relation to national highways, export roads and major commercial roads. $700 million will be allocated for other road projects and a further $26 million for planning and research projects in relation to both roads and urban public transport.

It is intended that a total of $350 million will be made available in 1 974-75.

Rail Transport

The Government recognises the importance of railways in our national transport system. Recently agreement was reached with the South Australian Government for construction of a standard gauge line between Adelaide and Crystal Brook, financed by means of grants and loans to South Australia. Expenditure this year is estimated at $900,000. Agreement has also been reached for the construction by Commonwealth Railways of a standard gauge line that will provide a secure all-weather link between Tarcoola and Alice Springs. Expenditure this year is estimated at $2 million

In recognition of the costs and problems caused by inadequate railway rolling stock, the Government will be implementing a purchase program by Commonwealth Railways for modern high-performance bogie wagons suitable for inter-system use. These wagons will be available for lease by State railway systems at an agreed rate and will, to some extent, overcome recent shortages of rolling stock experienced by the transport industry. The acquisition program provides for 500 wagons to be ordered this year and 800 next year.

At the June Premiers’ Conference the Prime Minister said that we would be looking to those of our business enterprises which are not paying their way- that is, whose losses are being imposed on the taxpayer- to lift their charges. Accordingly, some increases in Commonwealth Railways passenger fares and freight rates have been made and a thorough examination of the fare and freight rate structure is being undertaken.

Urban Public Transport

As part of our program to assist in the upgrading of urban public transport, we will provide almost $28 million towards the cost of new projects in 1974-75. The States will also receive about $39 million in 1974-75 towards the costs of projects approved in 1973-74. A total of $67 million is therefore included in the Budget, out of a total of $138 million which the Government has so far agreed to provide under this program.

The States Will also be reimbursed for twothirds of their expenditure in 1973-74 on approved urban public transport research and planning projects. $1 million was recently appropriated for this purpose. The States will be eligible for further assistance for these purposes under the Transport (Planning and Research) Act 1974.

The Australian Government has made an offer to the New South Wales Government to construct and operate a railway radiating from Parramatta in the western suburbs of Sydney. The New South Wales Government has not yet accepted this offer, but provision has been made in the Budget for an amount of $3.5 million to allow the project to proceed as soon as it does so.

Shipping and Harbours

As announced by the Prime Minister, the Australian Government is negotiating with the New South Wales Government for the construction of a large new graving dock at Newcastle. A provision of $3.75 million is being made to cover estimated expenditure in 1974-75.

The Government’s policy to increase the share of the nation’s trade carried in Australian flag vessels entails a large capital expenditure program for the Australian National Line. A Budget provision of $54.7 million is being made this year for the ANL compared with $7 million last year.

The Australian Government provides financial assistance to the Australian Shippers’ Council, which negotiates, on behalf of national export and producer bodies, the terms and conditions of carriage in Australia ‘s outward liner trades. This year, the Government Will increase its financial assistance to a maximum of $90,000, compared with $35,000 last year, on the basis of two dollars for every dollar expended by the Council.

Pipeline Authority

An amount of $75 million has been provided for advances to the Pipeline Authority for expenditure on the Moomba-Sydney natural gas pipeline and spur pipelines.

page 1284

WATER SUPPLY

We are making a start on a program of financial assistance towards the provision of urban water supplies in Adelaide and North West Tasmania; this year the Budget provides $4.4 million to South Australia for the initial phase of a program of construction of water treatment plants in Adelaide. No payments will be required for the North West Tasmania scheme in 1974-75.

page 1284

INDUSTRY ASSISTANCE AND DEVELOPMENT

Assistance for Agricultural and Pastoral Industries

As announced recently by the Minister for Agriculture, the Government has approved the operation by the Australian Wool Corporation during the 1974-75 season of a minimum reserve price equivalent to 250 cents per kilo clean for 2 1 micron wool. The Government has indicated that it is prepared to guarantee repayment of amounts borrowed by the Corporation to finance these operations and the “pot-holing” activities the Corporation will continue to carry on when the market is above the floor.

The aim of the new arrangement is to provide firm support to the market and give greater confidence to both wool growers and overseas buyers.

The Government has provided in the Budget for an advance to the Corporation of the $13 million available in the Corporation’s Working Capital Trust Fund.

I shall also shortly introduce legislation to appropriate funds to enable me to make loans in addition to those provided for in the Budget to the Corporation as they are required.

The Budget also reflects the arrangements made for an increase in the levy on grower’s returns from sales of wool during 1974-75 to meet any losses from the operation of the floor price scheme. This additional amount, estimated at $44.7 million, will be collected and paid to the Corporation’s Market Support Fund. If no losses are incurred, the contribution will be used for building up reserves.

In accordance with the present Wheat Industry Stabilisation Scheme, and as a result of buoyant export prices, it is estimated that wheat growers will contribute an amount of $39 million to the Stabilisation Fund in 1974-75 in respect of the 1973-74 pool.

In accordance with the decision last year to phase out the bounty on butter and cheese production, an amount of $9 million is being provided for the bounty in 1974-75, compared with $18 million in 1973-74. However, increased funds are being provided for dairy industry adjustment through the broadened Marginal Dairy Farms Reconstruction Scheme. The estimated cost in 1974-75 is $11.5 million, as against $1.1 million last year.

The appropriation for the Rural Reconstruction Scheme in 1974-75 is $30 million. In addition, the fruitgrowing reconstruction scheme will be extended to 31 December 1975 and a provision of $1.5 million is made for that purpose.

An amount of $2.6 million is being provided for an apple export guarantee scheme for the 1974 season. This follows agreement with the States of Tasmania, Western Australia and Queensland that the Australian Government will meet half the costs of underwriting the returns on apples exported “at risk” during 1974 to the United Kingdom and Europe.

With the expiry of the Phosphate Fertilizers Bounty Act on 31 December 1974 the cost of the bounty in 1974-75 will fall to an estimated $33 million, compared with expenditure of $67 million in 1973-74.

Subject to the agreement of the States of New South Wales, Victoria, Queensland and South Australia, it is proposed to set up an Australian Plague Locust Commission to combat outbreaks of this pest. An amount of $250,000 is being provided in 1974-75 as the Australian Government’s proposed 50 per cent share of the costs of establishing the Commission.

The Government has decided to provide a grant of $3 million towards the cost of a weir at Clare on the Burdekin River; $300,000 will be provided in 1974-75. A grant of up to $120,000 will be provided for restoration of damaged levees along the Proserpine River.

The Government has decided to extend its assistance to the Bundaberg Irrigation Project by a grant of $4.4 million; $2 million will be provided for the project in 1 974-75.

We propose to provide financial assistance to the States for a two-year Water Quality Assessment Program costing $808,000, to complement the existing program of surface and underground water measurement. The Budget provides $332,000 for this program in 1974-75.

The Government proposes to assist the States with a long-term program of soil conservation. An interim two-year program of financial assistance will be commenced this year. Grants totalling $2.5 million will be provided, of which $500,000 will be made available in 1974-75.

Mining Industry

The Parliament has now passed the Petroleum and Minerals Authority Act, and the Budget provides $50 million for the Authority’s proposed activities in 1974-75.

As announced last year, the petroleum search subsidy scheme expired on 30 June 1974. An amount of $6 million is provided in the Budget for payments still to be made in respect of approved exploration programs completed before that date.

Manufacturing Industry

The Budget provides $ 1 5 million for payments this year under the existing Industrial Research and Development Grants Scheme. As announced in last year’s Budget Speech, a review of the existing scheme is being made.

An initial provision of $10 million is being made for assistance to firms by the proposed Structural Adjustment Board under the Government’s scheme of adjustment assistance for firms affected by Government action to bring about desirable structural change.

Tourist Industry

The Government will widen the criteria under which grants may be given for the development of tourist attractions. The Budget provides $2.25 million for grants under the extended scheme.

Labour and Employment

Employment Training $17.8 million has been provided for the National Employment and Training System in 1974-75. Details will be announced later in the Budget Session by the Minister for Labor and Immigration.

The Government has decided to extend further its programs of assistance to industry and commerce to encourage a training consciousness in the private sector. $452,000 has been included for the training of training officers.

Apprenticeship Training

There will be an increase of $8.8 million in Government support for apprenticeship training this year. Stalls will be announced later by the Minister for Labor and Immigration.

page 1285

GENERAL PUBLIC SERVICES

I turn now to the area of General Public Services.

Legal Aid

In furtherance of its policy on legal aid, the Government has established the Australian Legal Aid Office. The establishment of the Office is a major step towards the Government’s objective of ensuring that legal aid is readily and equally available to all citizens. Australian Legal Aid Offices are already operating in the capital cities and certain regional centres, and more will be opened during 1974-75. Meanwhile, the program of grants to supplement existing legal aid schemes will be continued in 1974-75. Total expenditure on legal aid in 1974-75, including for Aboriginals, is estimated at $ 12.4 million.

Foreign Affairs and Overseas Aid

The Government is concerned about the plight of needy people in less developed countries overseas including, of course, Papua New Guinea for which we continue to have special responsibilities.

A total of $341.3 million has been provided for expenditure on external economic aid during the current financial year. This is $81 million or 3 1 per cent greater than the comparable figure for 1973-74. Details are set out in the white paper on External Aid issued as one of the Budget.

Mr CREAN:
ALP

– The honourable member for Kooyong can read the details in the White Paper.

Mr Peacock:

– There is a credibility gap.

Mr CREAN:

– There are a lot of credibility gaps in Australia today.

Mr Peacock:

– You are the personification of it.

Mr CREAN:

– I think that they are not isolated to us.

Mr SPEAKER:

-Order! Interjections will cease.

Mr CREAN:

– Notwithstanding the adverse effects which higher oil prices are having on our own balance-of-payments position, the Government has allocated $40 million for expenditure on purposes related to the proposed United Nations Special Program of assistance to developing countries which have been seriously affected by the recent sharp increases in oil prices and related international developments. This assistance will take the form of grants and will be additional to the significant increases provided for in Australia ‘s other on-going aid activities.

page 1286

SCIENTIFIC RESEARCH

$180,000 is provided in the Budget for detailed design studies of research vessels for CSIRO and the Australian Institute of Marine Science, and of a large stellar interferometer to complement astronomical research being undertaken in Australia.

The Government proposes to establish a scheme of advice and assistance to private inventors. The Budget provides $200,000 for this purpose.

Administrative Services

Australian Government Offices

Turning to Administrative Services, the amount and cost of office accommodation leased for Government departments continues to concern the Government. Proposals have been developed to start correcting in 1974-75 the heavy imbalance between government-leased and government-owned accommodation.

Ceiling on Staff Growth

The growth of full-time staff employed under the Public Service Act during 1974-75 has been limited to a ceiling increase of 2.6 per cent. When allowance is made for staff on various forms of leave, the increase in total operative staff for the year ending 30 June 1975 will in effect be held to 1 per cent The Government expects that these restraints will result in a critical review by departments of procedures and work priorities.

A similar approach has been adopted in relation to Government authorities whose staff are not employed under the Public Service Act. state loan council programs

In June, the Government supported an increase in the States’ Loan Council programs of 10 per cent The Government has now decided to support a further increase of 10 per cent. As a result, the States will receive an addition of $92.5 million to their programs, of which $29.7 million will be in the form of interest-free capital grants. These programs for 1974-75 will now total $1,027.4 million. local government grants

The Government has already announced its acceptance of the recommendations contained in the Grants Commission’s first report on financial assistance for local government.

These unconditional grants provide $56,3 million for 807, or 92 per cent of, local governing bodies. Their purpose is to assist individual local governing bodies to provide services which are comparable with services enjoyed by communities elsewhere in Australia. The funds are not intended to replace existing State Government grants or rates charged by Councils.

To assist in the establishment of the regional organisations which make applications for assistance to the Grants Commission, we have provided an amount of $314,000 towards administrative expenses and to encourage regional planning.

page 1286

RECEIPTS

At existing rates of taxation and charges, receipts in 1974-75 are estimated to increase by $3,894 million to $15,896 million.

I deal first with those measures which will add to revenue.

Wireless Telegraphy Fees

The licence fees for radio communication ser vices licensed under the Wireless Telegraphy Act have remained unchanged since 1970. The existing licence fees of $10 per annum for Land and Fixed Stations, and $6 per annum for Receiving Stations and Mobile and Amateur Stations, will be doubled.

Passport Fees

The fee for issuing a passport has been unchanged since 1966. The present fee of $4 is well below the cost of issuing a passport and it is proposed to increase it to $10.

Mr CREAN:
ALP

– The honourable member for Kooyong is lucky that he has one.

Liquefied Petroleum Gas

In my Budget Speech last year I said that the question of levying a tax on liquefied petroleum gas was being put under study. An interdepartmental committee has now reported to the Government on all considerations, including environmental considerations, relevant to the taxation of liquefied petroleum gas.

Mr CREAN:
ALP

-It soon will be. On the basis of that report the Government has decided to introduce a tax on liquefied petroleum gas used in propelling road vehicles, but not on gas used for other purposes. The rate of tax will be set initially at 2 cents a litre-we have even gone metric- which is about 40 per cent of the present rate of duty on motor spirit. Should there be any increase in the rate of duty on motor spirit in future, it is proposed that the tax on liquefied petroleum gas will be increased by an amount equivalent to one-half of that increase. It is not proposed to review this basis for setting the relative rate of tax on liquefied petroleum gas for at least five years and the industry can, therefore, plan on that basis.

Customs and Excise Duties on Brandy

As announced in last year’s Budget Speech, the difference between the rates of duty on brandy and on other spirits is being abolished by raising the duty on brandy in three equal annual steps. The first stage of the increase was implemented last year and there will be a further increase in duty this year equivalent to 40 cents per litre of alcohol.

Pay-roll Tax

Pay-roll tax in the Australian Capital Territory and the Northern Territory will be increased by one-half of one per cent, to 5 per cent, on wages payable on or after 1 December 1974. This will bring the rate into line with that imposed by the States since 1 September.

Life Insurance Companies

The deduction allowed to life insurance companies under section 115 of the Income Tax Assessment Act will be reduced from 2 per cent of calculated liabilities to 1 per cent in respect of income year 1974-75. This is a further step towards ensuring that life insurance transactions, looked at in their totality, bear a fairer share of overall taxation.

Private Company Rates

As announced in last year’s Budget Speech, there will be a further increase in the rate of company tax on private companies to equate it with the public company rate of 47V4 per cent in relation to income of the 1 973-74 income year.

Mr CREAN:
ALP

– This is old news. I announced this last year. I am sure you will be pleased to know we are not proposing to alter it.

Taxation of Income from Mining

Several amendments are proposed to the income tax law affecting enterprises engaged in prospecting and rnining other than for gold. At present both general and petroleum mining enterprises are able to defer payment of tax for long periods under provisions for the allowance of immediate or accelerated deductions for capital expenditures, including anticipated expenditures. As a result, many highly profitable companies have paid relatively little tax over an extended period.

Other provisions exempt from tax 20 per cent of income derived from production of certain minerals, including bauxite, copper, nickel and beach sands. There is no justification for this exemption and it will be withdrawn as from 1 July 1974.

Deductions will not in future be allowable for capital expenditure incurred on company formation and capital raising. Capital expenditure on the development of a mine or well, on the provision of community faculties adjacent to a mine or well, or on the purchase of rnining rights or information will be deductible henceforth over the estimated life of the mine or well. Where the estimated life is longer than 25 years the allowance will be one twenty-fifth of the undeducted capital expenditure. Capital expenditure on facilities for the transport of minerals will be deductible for income tax purposes over 20 years instead of 10 years. However, in relation to any of those expenditures to be made by 30 June 1976 under contracts already entered into, deductions will continue to be allowable under the present provisions of the law.

Exploration expenditure incurred by general mining companies in 1974-75 and subsequent income years will be allowable as immediate deductions up to the level of income derived in any year from general mining and associated activities in the same way as petroleum prospecting and mining companies are allowed immediate deductions against income from petroleum for similar expenses. Prospecting and other activities carried out by general mining companies on the continental shelf will be regarded as having been carried out in Australia, consistent with the taxation treatment of petroleum operations carried on at off-shore locations.

Age Rebate

As I announced on 5 July 1974, the special age rebate to be allowed in calculating tax payable by aged people for 1974-75 will be set at a basic $ 130. The rebate was introduced as a transitional measure last year, as part of the package of measures associated with the commencement of phasing out of the means test. It has now served its transitional role, but it is being phased out gradually.

Fringe Benefits

In practice, it has proved difficult to enforce general provisions of the income tax law on the value of some benefits given to employees in addition to their remuneration. Accordingly, amendments to ensure that certain fringe benefits are properly subject to income tax are proposed to apply as from the 1974-75 income year.

Deductions will cease to be allowable for expenditures on club dues, yachts and pleasure boats. The minimum assessable value to a taxpayer of the use of a motor vehicle provided by his employer will be determined under a formula to be prescribed in the law. The value for income tax purposes of benefits received by employees under stock option and share purchase schemes entered into after today will be ascertained as at the time of exercise of the options or the transfer of the shares.

Concessional Deduction for Education Expenses

The Australian Government’s programs involve substantial increases in direct expenditures on education and there is no longer a case for providing substantial indirect assistance through the taxation system. Accordingly, the amount deductable against 1974-75 income for education or self-education expenses will be reduced from $400 to $ 1 50 for any one student.

Mr CREAN:
ALP

– You will be interested in this next one.

Surcharge on Property Income

The Government considers that income which an individual receives from property- that is, unearned income- should bear more tax than income from personal exertion. The Australian taxation system did, in fact, tax unearned income at higher rates than income from personal exertion from 1915 to 1953 and a number of other countries tax unearned income at special rates.

A surcharge will therefore be imposed on property income received by individuals in 1974-75. The surcharge will be 10 per cent of the tax on property income included in the taxable income. This tax will be calculated by applying to property income the average rate payable on total taxable income under the ordinary rate schedule.

Mr SPEAKER:

-Order! Interjections will cease. The honourable member for Barker will remain silent. This is the last time that I will warn the honourable member.

Mr CREAN:

– The surcharge will be reflected in provisional tax for 1974-75. 1 am sure that the next equitable measure will please honourable members opposite- it is called a capital gains tax.

Capital Gains Tax

I announced on 23 July 1974 that we would introduce a capital gains tax. Capacity to pay tax is enhanced by capital gains as well as increased income. It has therefore been unfair that income has borne full tax while capital gains have borne none. Taxpayers have also been able to manipulate their transactions so as to substitute capital gains for income and thereby avoid taxation.

Mr CREAN:
ALP

-Well, the right honourable gentleman should not need any telling. He knows. The new tax will apply to capital gains realised after today. However, in relation to property already held, the tax will fall only on gains accruing after today. Today’s values will be taken as one basis of calculation of those gains, but where today’s values are below the cost of acquiring property, the new tax will not apply unless realization value exceeds that cost.

Mr Hunt:

– Do you get credits for losses?

Mr CREAN:

– If you listen you will hear, but I do not know whether you will understand.

Mr Nixon:

– You are a bit hard to follow.

Mr CREAN:

-That is why you should listen carefully.

At the taxpayer’s option, however, gains accruing after today will be the proportion of total gains that, on a time basis, is related to the period of ownership of assets after today.

Capital gains will include gains from the disposal of assets, capital sums otherwise derived from assets, foreign exchange gains, and gains from the purchase of debentures by their issuer. A disposal will be deemed to occur in cases extending beyond sales and exchanges, and will include compulsory acquisitions, losses or destruction of property, creation of a trust, gifts, transfers on death- in broad terms, any passing of property or an interest in property from one person to another will be included. Capital losses will be deductible against capital -

Mr Nixon:

– What about the ordinary house?

Mr Killen:

– Yes, that is a fair question.

Mr CREAN:

– Listen again.

Mr SPEAKER:

-Order! Members of the Opposition will be provided with ample opportunity if they wish to speak on the Bill at a later stage.

Mr Peacock:

– They will probably be gagged.

Mr SPEAKER:

– I warn the honourable member for Kooyong. I have spoken to the honourable member several times. I have given him my last warning. If I have to speak to him once more I will take action.

Mr CREAN:

-Capital losses will be deductible against capital gains, but not against income, and for the purpose of deductibility capital losses will be permitted unlimited carry-forward during lifetime and a three year carry-back on deemed disposal at death.

The new tax will not apply to any amount that qualifies as income for income tax purposes. Particular examples are profits from the sale of property which are subject to income tax under sections 25, 26 (a) and 26AAA of the Income Tax Assessment Act

For the benefit of the honourable member for Gippsland, gains on sale of a taxpayer’s principal residence will be exempt from the new tax and there will be other exemptions and reliefs.

Half of the capital gains realised by an individual in a year will be included in assessable income and taxed at income tax rates. That is, the rate of the capital gains tax levied on individuals will be equivalent to not more than one-half of the marginal tax rate which would have applied had the gain been taxed as income. The gains of companies will bear tax at a rate equal to half the maximum marginal rate of tax on individuals, namely 33V4 per cent.

It is proposed, however, that full income tax rates, whether for companies or individuals, should apply to one category of capital gainsnamely that part of gains realised on the sale of land which reflects actual or potential change in use. Gains of this kind accrue from community decisions and the benefits of such decisions should accrue to the community. This aspect of the capital gains tax will have a significant impact in controlling land speculation.

These are the key features. There are many complex technicalities involved and extensive anti-avoidance provisions will be required. For these reasons it will not be practicable to introduce legislation before the Autumn sittings. Meanwhile, I am circulating an explanatory paper giving a more detailed but still broad outline of what is proposed.

I come now to the Government’s proposed tax concessions.

Concessional Deductions for Dependants Residing Overseas

As announced in the Policy Speech, the income tax law will be amended to enable Aus.tralian residents to claim deductions in 1974-75 and subsequent income years for the maintenance of dependants who are not residing in Australia.

Depreciation on Child Care Facilities

As also announced in the Policy Speech, the income tax law will be amended to provide specifically for depreciation deductions in 1974-75 and subsequent income years for capital expenditure by employers on the provision of child care facilities for children of their employees.

Estate Duty

Two amendments will also be made to the estate duty law to give effect to undertakings in the Policy Speech. We shall set up a board to hear applications for release from payment of duty in cases of serious hardship, to be composed in the same way as the existing boards that consider similar matters relating to income tax and payroll tax.

The other amendment will exempt from duty, along lines indicated in the Policy Speech, an interest in a principal matrimonial home that passes to a surviving spouse. Before calculating the statutory exemption from duty the unencumbered value of such an interest up to $35,000 will be excluded from the value of the estate. Where the unencumbered value is more than $35,000 the amount excluded will be $35,000 less $7 for every $10 in excess of $35,000. The amendment will apply to dutiable estates resulting from deaths since 29 April 1974 of persons domiciled in Australia

Home Mortgage Interest

The Government’s scheme of income tax deductions for home mortgage interest has already been outlined. The legislation Will be introduced during the present sitting of Parliament and will apply to interest payments since 1 July 1974.

I come now to the major new taxation concessions proposed by the Government. In aggregate they amount to $500 million in value in a full year

Broadcast Listeners’ and Television Viewers’ Licence Fees

First, I announce that the Government has decided to abolish broadcast listeners’ and television viewers’ licence fees. The National Broadcasting and Television Service is a service provided to the community as a whole, and the Government believes that the cost of the service should therefore be met out of general taxation revenues rather than through a licence feewhich, being a poll tax, bears relatively more heavily on the less affluent.

Licences which become due for renewal on or after tomorrow, 18 September 1974, need not be renewed.

There will be a full-year saving to listeners and viewers of $71 million.

Mr CREAN:
ALP

-No. We treat you all the same. You do not need to renew it any more.

Personal Income Tax

A revised tax rate scale will apply to 1974-75 incomes of individuals. Compared with the present scale, reductions in tax will apply to taxable incomes up to nearly $10,500 with slight increases above that. The largest reduction will be about $100 a year at a taxable income of $6,000.

Mr CREAN:
ALP

-$100 a year. Further details are given in a separate statement.

Mr McMahon:

-What about the antiinflationary provisions?

Mr CREAN:

– The honourable member should listen to the next bit

Mr McMahon:

-I do not want to listen any more. It is so boring you have ruined it.

Mr CREAN:

– There are so many good things that one has to tell the lot. The revised scale will be reflected in PA YE deductions as from 1 November 1974.

In addition to the reductions in tax on low incomes in general under the new rate scale, we see a particular need for tax relief to low income families. A special rebate of tax will be introduced for that purpose. If a taxpayer’s saving of tax at ordinary rates from his dependants maintenance deductions would be less than 40 per cent of the amount of those deductions, a rebate of tax will be given to bring the tax saving up to 40 per cent or up to the tax otherwise payable if that is less. In some cases the rebate will extinguish tax altogether and the savings in some cases will be as high as $5 or $6 a week. Where this does not happen, it will be greater the lower the income of the taxpayer and the larger his dependants deductions. Taxpayers who would already be saving 40 per cent or more of their dependants deductions will not benefit.

The rebate will be reflected in P A Y E deductions as from 1 November 1974. A separate statement explains it further.

The total cost to revenue of the restructuring of the rate scale and the special rebate for low income families is of the order of $430 million on a full-year basis.

The combined effect of these two measures will be to cut dramatically the tax payable by those on lower incomes with dependants. For example, a taxpayer with a dependent spouse and two dependent children and with average other deductions earning $70 a week paid $213 in tax on 1973-74 income; on 1974-75 income no tax will be payable. If he earns $90 per week the tax payable will be cut by more than half, from $389 per annum to $190. At $120 a week the gains remain significant, tax payable falling from $739 per annum to $577.

Taken together, our tax measures constitute major reforms. They will make the tax system fairer and more equitable. The great majority of wage and salary earners, and especially lowincome single-income families, will pay less tax as a result.

Revenue Totals

The cost to revenue of the restructuring of the income tax rate scale, the special rebate for low income families and the abolition of broadcast listeners’ and television viewers’ licence fees is, as I have said, about $500 million on a full-year basis. Some part of that cost will reflect itself in refunds of personal income tax in early 1 975-76.

The net cost to revenue of the general revenue measures I have announced- that is, excluding the proceeds from the proposed increase in the wool levy-is about $237 million in 1974-75. Details, including the revenue estimates for each of the separate decisions, are given in Statement No. 4.

After allowance for the decisions we have taken, it is estimated that receipts will be $ 1 5,704 million in 1974-75. This would be an increase of $3,702 million, or 30.8 per cent, over the 1973-74 level.

page 1290

BUDGET OUTCOME

I now summarise the Budget aggregates.

Budget outlays are estimated to increase by $3,980 million, or 32.4 per cent, to $16,274 million in 1974-75. Budget receipts are estimated to rise by $3,702 million, or 30.8 per cent, to $15,704 million.

The estimated deficit is thus $570 million but in respect of the domestic balance there is an estimated domestic surplus of $23 million. Those estimates compare with the deficit of $293 million and the domestic surplus of $2 1 1 million in 1973-74.

page 1291

CONCLUSION

The keynote of this Budget is social progress. We are looking to create a fairer and better Australia.

The year ahead will be a difficult one. The world is beset by severe economic problems.

Australia cannot insulate itself from them nor can it be saved by the bleatings of previous Treasurers.

The Budget, together with our other policies, is designed to make the best of things as they are in the world today- to maintain employment opportunities and to protect those who most need protection from the ravages of inflation. At the same time we are looking to the longerterm to the way Australia develops as a nation in the decades ahead. The problems immediately ahead have to be dealt with but in doing so this Government will remain steadfast in implementing its programs.

I commend the Budget to Honourable Members.

Debate (on motion by Mr Nixon) adjourned.

page 1293

STATEMENT No. 1 - SUMMARY OF THE 1974-75 BUDGET

Budget Aggregates

The broad aggregates of the 1974-75 Budget, together with comparable data for 1973-74, are shown in national accounts form in the following table: The main points that emerge from the Budget aggregates are: o *Budget* outlays are estimated to increase by 32.4 per cent in 1974-75, considerably faster than the increase of 20.2 per cent in 1973-74; o after taking account of the net effect of the revenue measures proposed *Budget receipts* are estimated to increase by 30.8 per cent in 1974-75; o *the estimated overall deficit* of $570 million is about $278 million greater than in the previous year - the estimated *domestic surplus* of $23 million is smaller, by about $189 million, than in 1973-74; o this estimated net outcome is heavily influenced by the effect of inflation on revenue and comparisons with past deficits have limited significance for purposes of economic analysis; o the last point can be illustrated by pointing out that should inflation be less severe than assumed in calculating the revenue estimates, the deficit will be larger, yet it would be meaningless to suggest that that outcome implied that the larger deficit had added to inflation. The difference between the total deficit and the domestic surplus figures shown in the preceding table is attributable primarily to the fact that there is sizeable expenditure overseas from the Budget each year. It should be noted that the immediate effects of overseas outlays are on the balance of payments - they do not add directly to domestic incomes and the demand for locally-produced goods and services. Estimated movements in domestic and overseas outlays in 1974-75, compared with the actual increases in 1973-74, are shown in the table below: The following table provides details of the estimated movements in the major components of *domestic* outlays in 1974-75, compared with the actual increases recorded in those components in 1973-74. Within domestic outlays, increases in government direct expenditures on goods and services are reflected in full in the level of aggregate demand, while the impact of transfers and advances on domestic activity depends on the spending propensities of the income recipients. The various recipients of different types of advances and transfers are also, of course, likely to have different spending patterns. {:#subdebate-60-1} #### Functional Classification of Budget Outlays A detailed account of estimated Budget outlays in 1974-75, classified by function, together with comparable figures for each of the past two years, is presented in Statement No. 3. The summary table below shows Budget outlays in 1973-74 and estimated outlays in 1974-75 classified by broad functional groups. The major features are: o the continued very large rise in outlays in the function 'Urban and Regional Development nec and the Environment' - this reflects, in the main, very sizeable increases in the allocations for the growth centres, Land Commissions and sewerage programs; © a very large increase of $675 million or 78 per cent in outlays on 'Education' reflecting, among other things, the full-year effects of the undertaking by the Australian Government, as from 1 January 1974, of full financial responsibility for universities and colleges of advanced education, increased allocations for technical and further education following the Kangan Report, and the provision of greatly increased funds to the Schools Commission and for the child care program; o the increase of $952 million or 38 per cent in outlays on 'Social Security and Welfare' following the very large increase in 1973-74; e the increase of $284 million or 30 per cent on 'Health', the major new initiative being the provision of funds to the States for hospital development; © the increase of $392 million or 25 per cent in the 'Economic Services' function, which covers a wide range of programs including transport and communications, industry assistance and development, and labour and employment - this increase reflects provisions of $50 million for the Petroleum and Minerals Authority, $75 million for the continuation of the activities of the Pipeline Authority, $67 million for urban public transport initiatives and increased provisions for roads, shipping and airlines. A table showing a cross-classification of estimated Budget outlays in 1974-75 by function and economic type follows: {:#subdebate-60-2} #### Budget Receipts On the basis of existing rates of taxes and other charges it is estimated that total receipts in 1974-75 would amount to $15,896 million, an increase of about 32 per cent on actual receipts in 1973-74. After allowing for the net effect in 1974-75 of the revenue measures announced in the Budget Speech total receipts in the year are estimated to amount to $15,704 million, an increase of 30.8 per cent compared with 1973-74. Details of the receipts estimates for 1974-75, including the revenue measures announced in the Budget Speech (some of which will not have their full impact until 1975-76), are presented in Statement No. 4. {:#subdebate-60-3} #### Historical Data Two statements attached to the Budget Speech provide historical data on Budget transactions. Statement No. 5 contains a detailed account of the Budget result in 1973-74; Statement No. 6 provides a historical coverage of Budget data in both functional and national accounts form for the period 1964-65 to 1974-75. An Appendix to the Budget Statements describes the basis of the functional classification of Budget outlays and the changes in classification which have occurred since this new presentation was introduced in last year's Budget. {: .page-start } page 1297 {:#debate-61} ### STATEMENT NO. 2 - THE BUDGET: THE ECONOMIC CONTEXT The 1974-75 Budget has been framed in an unusually difficult economic context. Unemployment and prices are rising and the balance of payments is deteriorating. While there is always a degree of uncertainty about economic prospects, in present circumstances the outlook is *especially* uncertain. The policy options chosen in framing the Budget reflect Government objectives, both as regards social and economic policies, and the Government's judgment as to how the overall economic situation will develop. This Statement is devoted to describing the economic context in which the Budget has been framed and to considering the prospects for the economy in 1974-75 as they presently appear. *Review of Developments in 1973-74* For most of 1973-74 the economy, while growing strongly, was subjected to exceptional strains including shortages of goods and materials, extremely tight labour market conditions and severe inflationary pressures. During the year monetary, tariff and exchange rate policies were directed towards relieving those strains. By the closing months of 1973-74 signs were appearing that excessive demand pressures were abating. Developments in early 1974-75 confirmed this trend; in some industries demand pressures were easing quite rapidly. Cost pressures, however, remained intense. In constant price terms, total spending on goods and services in 1973-74 increased more than twice as fast as domestic production. This was in marked contrast to 1972-73, when increases in expenditures and output were both much smaller and of roughly the same order. Changes in the major national accounting aggregates at constant prices in 1972-73 and 1973-74 are shown in the following table. Private sector spending rose more rapidly than public sector spending in 1973-74. This reflected a greater measure of success by the private sector in competing for available resources rather than any deficiency of public sector demand. With household disposable income rising by over 20 per cent in 1973-74, private *consumer* demand remained strong throughout the year, although shortages constrained growth in actual spending to some extent. Reflecting a massive infusion of finance in 1972-73, the *dwelling* construction industry remained severely over-stretched throughout 1973-74 and prices of houses soared. A fall in lending for housing from those inflated levels, however, began to have its effects towards the end of 1973-74. While the number of dwellings under construction at the end of the year was at a record level it was clear that, with approvals falling off steadily, the situation in the industry was changing. *Business fixed investment* in 1973-74 was 12.3 per cent higher than in 1972-73. Capital spending recovered strongly in the first half of the year but the recovery did not persist. A substantial increase in investment had been expected by businesses in the second half of 1973-74 but this was not realised. Shortages of labour, materials, and equipment imposed some initial restraints on investment programs but, more recently, uncertainty as to future prospects, both as regards demand and inflation, appears to have led to such programs being reduced or deferred. Strong demand coupled with supply problems restrained *non-farm stock accumulation* until the second half of 1973-74 when stocks increased sharply. Much of this increase is thought to have reflected a build up in stocks of imported goods. *Public sector* spending, in constant price terms, rose moderately during 1973-74. Administrative and resource constraints - particularly in respect of capital spending in the first half of the year - resulted in delays and underspending on some programs. After four years in which *exports* ran ahead of *imports,* the pattern was substantially reversed during 1973-74. This turnaround in the impact of the external sector - from a net drain on Australian resources to a net contribution to supplies - reflected both the strains on the domestic economy and the action taken through exchange rate adjustments and tariff reductions to increase supplies of imported goods. *Exports* of goods and services increased by 13 per cent in current price terms in 1973-74 but the volume of exports declined by about 5 per cent *Imports* of goods and services grew by 44 per cent in value terms and by about 30 per cent in volume terms. The balance on current account changed from a surplus of $665 million in 1972-73 to a deficit of $707 million in 1973-74. Over the year to June 1974, the number of persons in civilian employment increased by 218,000 or 4.7 per cent. The intense demand for labour resulted in a particularly strong rise in female participation in the labour force, with female employment increasing by 126,000 or 7.7 per cent and male employment by 92,000 or 3.0 per cent. As these figures indicate, the labour market was at full stretch throughout most of 1973- 74 but showed signs of easing towards the end of the year. In the early part of 1974- 75 there was a sharp intensification of this tendency, with a marked rise in unemployment. In seasonally adjusted terms persons registered as unemployed (excluding school leavers) increased in number from 71,000 to 111,000 between end-June and end-August. Registered vacancies at the end of August totalled 48,200, seasonally adjusted, having fallen from a peak of 92,000 in March 1974. Wage and price increases gathered pace over the course of the year. In the June quarter the Consumer Price Index rose by 4.1 per cent while average weekly earnings per employed male unit jumped by 6.0 per cent. The acceleration in prices and earnings during 1973-74 is reflected in the following table: {:#subdebate-61-0} #### The Outlook for 1974-75 The 1974-75 Budget has been framed against the background of a slow-down in economic activity but continuing rapid increases in prices. As the year began there were signs of slack developing in some sectors of the economy. With little abatement of wage claims seemingly in sight, expectations of a further acceleration in prices remain widely held. That and other factors, notably the outlook for profits, appear to be leading to uncertainty and hesitancy, especially in respect of business investment. Given inflationary expectations and easing demand pressures the economic prospects for 1974-75 are more than usually uncertain. The course of many key indicators - including consumer spending, business investment and employment - will be particularly sensitive to trends in prices and wages. It is clear, however, that the pace of economic activity in 1974-75 will be much more subdued than it was in 1973-74. Seasonal conditions have been generally favourable to date and should these hold relatively strong growth in farm output can be expected in the current year. But only very moderate growth is likely in non-farm production. At this time gross non-farm domestic product at constant prices seems likely to increase by about 2 per cent in 1974-75, reflecting employment growth of about 2 per cent and little or no growth in productivity. Over much of the year aggregate demand is expected to be relatively weak and the level of unemployment is expected to increase. The above estimates reflect year-on-year comparisons. The pattern of growth *during* the year is expected to be uneven, with a slight downturn in gross non-farm domestic product in the current half-year followed by a return towards a more normal rate of growth in the second half of the year. The resumption of stronger growth in the second half year is expected as a result of the expansionary influence of the Budget, and of the working off of stocks, including imports. The uncertainties, especially in respect of the latter element in the situation, should, however, be noted Conditions in 1973-74 were clearly exceptional. Output and employment both expanded at unsustainably high rates but the growth in domestic supplies still fell well short of the growth in demand. In 1973-74 the extraordinary growth in imports permitted gross national expenditure to grow more than twice as fast as gross domestic product These same demand pressures on the economy will not operate in 1974-75 when the growth in gross national expenditure is likely to be similar to that in gross domestic product. The prospects for each of the main components of demand are not, of course, uniform. Personal consumption expenditure, which forms about 60 per cent of total final expenditure, is likely to grow more slowly than in 1973-74. The large increase in average weekly earnings, together with substantial rises in social security benefits and the personal taxation measures included in the Budget, will make moderate growth possible, despite slow employment growth and the likelihood of a substantial decline in farm income from the record 1973-74 level. The demand for consumer durables (including motor vehicles) is likely to be constrained to some extent while consumer credit restraint continues. What happens to private investment in 1974-75 will depend importantly on businessmen's own assessment of the economic outlook. On present indications - and especially given business pessimism about the trend in costs and profits - fixed investment by businesses seems likely to decline in 1974-75 after the recovery last year. Stock movements are difficult to predict in present circumstances but further substantial - and largely unplanned - increases in stocks could occur in the current half year before adjustments are effected in the first half of 1975. Spending on new dwellings is also likely to ease back from the admittedly excessive level of 1973-74. This, however, will be cushioned by action already taken to increase the flow of funds to public housing authorities and through the savings banks. The demand for goods and services by the public sector appears likely to be the strongest component of domestic demand in 1974-75. Very strong growth is expected in both current and capital expenditure, and at all levels of government. Spending by the Australian Government seems certain to be particularly strong. As the previous observations will have indicated, government programs in 1974-75 are not expected to be inhibited by serious resource shortages of the sort experienced in 1973-74. Export prospects at this time are particularly uncertain. Little real growth is expected in the economies of our major trading partners in 1974-75. The current year should see a recovery in the volume of exports but the outlook for prices is in many respects uncertain. Following exceptionally rapid growth during 1973-74, the volume of imports seems likely to remain high in the current half year before falling away in the first half of 1975. In current price terms, imports of goods and services are expected to rise significantly more than exports, in which case the current account of the balance of payments would record a substantial deficit in 1974-75. {: .page-start } page 1302 {:#debate-62} ### STATEMENT No. 3- ESTIMATES OF OUTLAYS, 1974-75 This Statement presents detailed estimates of Budget outlays in 1974-75. It is based on the *functional classification* of Budget outlays which was introduced in last year's Budget documents. There are, however, some modifications; these include the splitting of the 'Housing and Community Amenities nec' function into two separate functions, 'Housing' and 'Urban and Regional Development nec and the Environment' and the abolition of the 'Immigration' function, outlays under which have now been transferred to other appropriate functional headings. Total Budget outlays in 1974-75 are estimated at $16,274 million, an increase of $3,980 million or 32.4 per cent over actual outlays in 1973-74. Estimated Budget outlays for 1974-75, classified under functional headings, are shown in the summary table below, together with figures of actual outlays in the preceding two years. Outlays on defence in 1974-75 are estimated at $1,498.7 million, an increase of 12.3 per cent on outlays in 1973-74. This compares with an increase of 8.2 per cent in 1973-74. Estimated outlays on defence in 1974-75 represent 9.2 per cent of estimated total Budget outiays; the corresponding figure in 1973-74 was 10.9 per cent. {:#subdebate-62-0} #### Manpower Costs Provision has been made for an increase of $71 million in manpower costs in 1974-75. The main reasons for the increase are the full-year effect of awards and determinations made in 1973-74 and the planned build-up in Army strength. These increases will be offset in part by some reduction in strengths of civilian staffs. Manpower costs account for 59 per cent of estimated total defence outlays in 1974-75 compared with 61 per cent of actual defence outlays in 1973-74. {:#subdebate-62-1} #### Defence Equipment and Stores Outlays on defence equipment and stores are designed to ensure that operational equipment (ships, aircraft, etc.) is adequate to meet likely contingencies. Outlays on such equipment in 1974-75 are estimated at $91.9 million, an increase of $1.1 million, and relate mainly to projects already committed including two new Oberon submarines, an Oceanographic Ship and ten Sea King Helicopters for the Navy, Light Observation Helicopters for the Army and twelve Medium Lift Helicopters and thirty-seven CT4 Trainer Aircraft for the RAAF. Provision has also been made for initial payments on the new major equipment projects announced by the Minister for Defence in March 1974 - Destroyers, Tanks and Fire Support Vehicles, and Long Range Maritime Patrol Aircraft - and for other equipment, details of which will be announced by the Minister. Expenditure on supporting equipment in 1974-75 is estimated at $135.1 million, an increase of $25.9 million over 1973-74. About $14 million of this increase is due to a reallocation of costings from General Administrative Expenditure. Cost increases, particularly for fuel, are a dominant factor in the remaining increase of $12 million. Outlays on repairs and maintenance are expected to increase by $9.5 million, or nearly 22 per cent, in 1974-75. {:#subdebate-62-2} #### Defence Facilities Expenditure under this heading is to provide and maintain capital facilities including adequate living and working accommodation for personnel. Advances to the States for the provision of housing for servicemen and their families are estimated to total $16.1 million, or more than double the amount spent in 1973-74. The more significant of the other buildings and works items are the continuation of construction of the Naval Support Facility at Cockburn Sound (W.A.) and the upgrading of facilities at the Royal Australian Transport Corps Centre, Puckapunyal (Vic), Williamstown Dockyard (Vic.) and Canungra Jungle Training Centre (Qld.). Expenditure on these and other projects is expected to total $53.1 million in 1974-75, $9.4 million more than in 1973-74. Provision of $14.0 million has been made for the acquisition of an office building in Melbourne to improve the present inadequate accommodation of defence staff and to establish a single Defence Office in that city consequent upon the amalgamation of the former Service Departments and Defence. {:#subdebate-62-3} #### Industrial Capacity The main reasons for the expected increase of $8.1 million under this heading are higher wages costs in Government defence factories. These will increase the cost of maintaining reserve production capacity, and have made necessary the provision of additional working capital, mainly for the NOMAD aircraft project, to support the operations of the factories. {:#subdebate-62-4} #### Research and Development Establishments Expenditure on research and development is aimed at assisting the Services to keep abreast of advances in military technology and at developing weapons systems for Australia's defence needs. The estimated increase of $7.6 million to $67.5 million reflects mainly wage and other cost increases. Defence Co-operation Through defence co-operation the Government aims to help friendly countries in the region of immediate interest to Australia to strengthen their own, and the region's, capacity for defence. The estimated outlay of $24.5 million in 1974-75 includes $11.9 million for continuing assistance previously committed under three-year programs to Indonesia (a $20 million program) and to Malaysia and Singapore (programs of $16 million and $4 million respectively, which had not been fully expended by the due completion date of 30 June 1974 and which are being extended by the addition of $2.2 million to cover training and exercises). Military training assistance in Australia will continue to be provided on a small scale to some other countries, including Thailand and Fiji. New budgetary arrangements for providing financial assistance to Papua New Guinea for defence are being introduced from 1 December 1974. An amount of $12.5 million is being provided to cover requirements from 1 December 1974 to 30 June 1975. Previously all defence expenditure in Papua New Guinea was appropriated under other headings within the defence function. {:#subdebate-62-5} #### Storage and Transport Services Included in this category are removal and storage costs associated with the transfer of government employees, including servicemen, and the costs of operating Australian Government transport pools. Salary and wage determinations granted during 1973-74 are primarily responsible for the estimated increase of $3.2 million in 1974-75. {:#subdebate-62-6} #### General Administrative Expenditure This broad category of expenditure covers a wide range of items including travel, office requisites, postage and telephone services, light, power, and water supplies, freight and cartage, compensation payments, and medical and dental services provided by civilian authorities. {:#subdebate-62-7} #### Natural Disasters, Civil Defence and Other Included in this category are outlays on natural disasters, civil defence, war graves and various miscellaneous items. {:#subdebate-62-8} #### Overseas Expenditure Included in the estimated outlay of $1,498.7 million on defence in 1974-75 is provision for expenditure overseas amounting to $145.7 million, or $7.7 million more than in 1973-74. This estimate of expenditure overseas includes provision for payments in respect of the F111C and other aircraft, helicopters and submarines, and on maintenance of defence forces overseas; it does not include defence expenditure in Papua New Guinea or any overseas component of the remaining $12.0 million planned to be expended on defence co-operation for overseas countries. {: type="1" start="2"} 0. EDUCATION Education remains a high priority area for the Government and several important new initiatives to be undertaken in 1974-75 are outlined in the Budget Speech. Outlays by the Australian Government on education in 1974-75 will continue to rise rapidly because of new initiatives and the full-year effect of new policies introduced during 1973-74. In 1974-75 total outlays on education are estimated at $1,534.7 million, 78 per cent higher than outlays on education in 1973-74 and equivalent to 9.4 per cent of estimated total Budget outlays. As the following table shows, the prospective increase is spread over all levels of education. {:#subdebate-62-9} #### Tertiary and Technical Education {:#subdebate-62-10} #### Universities, Colleges of Advanced Education and Teachers Colleges Large increases are expected in 1974-75 in expenditure on education in universities, colleges of advanced education and teachers colleges. Expenditure on university education is estimated at $472.3 million in 1974-75, an increase of $140.8 million, while expenditure on the various colleges is estimated to increase by $127.2 million to $320.0 million. The fiscal year 1974-75 will be the first full year in which the Australian Government has full financial responsibility for universities and colleges. The large increases in outlays in part reflect the fact that prior to January 1974 grants were provided to the States for universities and colleges of advanced education and teachers and preschool teachers colleges on a matching basis. The States agreed that appropriate offsets, to take account of payments that they would no longer have to make to their tertiary institutions, would be made in the general purpose funds provided by the Australian Government to the States. (Details of these offsets are provided in Chapters II and III of *Payments To or For The States and Local Government Authorities 1974-75).* Other initiatives that were introduced in this area as from the beginning of 1974 were the abolition of fees in tertiary and technical education institutions and new student assistance measures. From January 1975 living allowances under the Tertiary Education Assistance Scheme will be increased and the means test relaxed to allow for movements in salaries and wages. This scheme, introduced by the Government in January 1974, provides non-competitive means-tested allowances to full-time non-bonded Australian students admitted to approved courses in tertiary and approved post-secondary institutions. The cost of the scheme for university and college students is estimated at $63.0 million in 1974-75, an increase of $35.1 million on outlays in 1973-74. There will also be increases from January 1975 in allowances payable under the Postgraduate Awards Scheme (included in 'student assistance' for 'Universities') and the Pre-School Teacher Education Allowances Scheme (included in 'student assistance' for *Colleges of Advanced Education and Teachers Colleges'). Outlays in 1974-75 are estimated at $8.4 million and $2.3 million respectively. The increase in 'other advanced education' is attributable to the fact that 1974-75 will be the first full year of operation of the Film and Television School; a provision has been made for expenditure of $2.8 million. The estimates for 1974-75 also reflect, for the first time, a further significant undertaking by the Australian Government in this area, namely the supplementing, as from 1974, of approved triennial programs of financial assistance to universities and the colleges to allow for wage, salary and other cost increases above the levels provided for when the original triennial programs were determined. An amount of $39.2 million to allow for retrospective cost increases has been incorporated in the grants for these institutions and $25.4 million has been allowed for further estimated adjustments of recurrent grants during 1974-75. Details of the Australian Government's programs of financial assistance for past triennia and for the current triennium (1973-75) for universities, colleges of advanced education and teachers colleges are included in Chapter IV of *Payments To or For The States and Local Government Authorities, 1974-75.* {:#subdebate-62-11} #### Technical Education In April 1973 the Australian Government established the Australian Committee on Technical and Further Education to make recommendations on financial assistance to the States for these forms of education from 1 July 1974. The Committee's Report was submitted in April 1974 and the Government has endorsed the general principles underlying its recommendations. The Government has decided on a $96.5 million program of assistance to the States over the two financial years 1974-75 and 1975-76 to enhance the quality and extend the availability of technical and further education, on the understanding that the States will not reduce the level of their own activities in technical education. The amount to be provided to the States in 1974-75 is $49.1 million. The Government also proposes to establish a permanent Commission on Technical and Further Education as a successor to the Committee. In addition, the Government has approved a capital program of $3.5 million for technical education in the A.C.T. over the two financial years 1974-75 and 1975-76. Prior to July 1974 assistance to the States for technical education had been made by way of unmatched grants; $28.6 million was provided in 1973-74. The increase of $8.2 million in outlays in 1974-75 for student assistance at technical institutions reflects the full-year costs of the introduction from January 1974 and the increased assistance to apply from January 1975 of the Tertiary Allowance Assistance Scheme. The Australian Government decided to reimburse the States in 1973-74 for fee revenue forgone as a consequence of the Government's decision to abolish fees at technical training institutions from 1 January 1974. The *States Grants (Technical Training Fees Re-imbursement) Act* 1973 provided $10.3 million for this purpose for the six months January to June 1974. {:#subdebate-62-12} #### Schools In total, expenditure by the Australian Government on schools and pre-schools is estimated to increase in 1974-75 by $321.0 million or 137 per cent to a total of $555.4 million. The schemes of financial assistance under which increased expenditure in 1974-75 is to take place are summarised below. (A detailed account of financial assistance for schools and pre-schools in the States is included in Chapter IV of *Payments To or For The States and Local Government Authorities, 1974-75.)* {:#subdebate-62-13} #### Schools Outlays by the Australian Government on schools reflect initiatives taken over the years to provide financial assistance to the States for certain specific activities of both government and non-government schools. It also includes, as from 1974, substantially increased measures of financial assistance approved by the Australian Government for the two years 1974 and 1975 on the basis of the recommendations of the Interim Committee for the Australian Schools Commission. Estimated outlays for 1974-75 include the first full-year effect of these latter measures which were incorporated in the *States Grants (Schools) Act* 1973. Outlays in 1974-75 under this Act have been increased by the Government's decision to escalate the approved levels of financial assistance, as from mid-1974, to allow for cost increases above the levels provided for when the original programs were determined. The estimated total amount involved is $48.5 million, including $1.5 million for the school library and science development programs referred to below. The Interim Committee has now been replaced by a continuing statutory authority, the Schools Commission. The first grants to the States, for government and non-government schools, arising out of the recommendations of the Interim Committee for the Australian Schools Commission, were paid from the beginning of 1974. These grants are estimated to total $343.5 million in 1974-75, compared with $84.4 million in 1973-74. The Schools Committee's program includes grants for general recurrent purposes at government and non-government schools, for new and upgraded buildings, for libraries, 'disadvantaged' schools, handicapped children, teacher development, special projects and information systems. Earlier legislation, the *States Grants (Schools) Act* 1972-73, provides for capital assistance for both government and non-government primary and secondary schools in the States by way of unmatched grants over the five-year period commencing 1 July 1973. In 1974-75 these grants will continue to run their course in parallel with the Interim Committee's program. The capital grants available in 1974-75 for government and non-government schools under the *States Grants (Schools) Act* 1972-73 are estimated to total $38 million. {:#subdebate-62-14} #### School Libraries The *States Grants (Secondary Schools Libraries) Act* of 1968 and 1971 provide for unmatched capital grants to the States for libraries in government and nongovernment secondary schools. This scheme terminates on 31 December 1974. Grants under these arrangements are estimated to total $4.7 million in 1974-75 compared with $10.3 million in 1973-74. Additional grants for libraries for 1974 and 1975 for both primary and secondary schools, are included in assistance made available under the Interim Committee's program (the *States Grants (Schools) Act* 1973). {:#subdebate-62-15} #### Science Laboratories The *States Grants (Science Laboratories) Acts* of 1964, 1965, 1967, 1968 and 1971 provide unmatched capital grants to the States for science laboratories and equipment in government and non-government secondary schools. This scheme terminates on 30 June 1975. Grants under these arrangements in 1974-75 are estimated to total $12.7 million compared with $9.8 million in 1973-74. Provision has been made for science laboratories in the assistance to be made available under the Interim Committee's program for 1974 and 1975 (the *States Grants (Schools) Act* 1973). *Schools in the Territories* A significant new development in the Australian Capital Territory is the establishment of an Interim Schools Authority to administer and develop the Government's pre-school, primary and secondary education systems. A program of up-grading library facilities at government schools will also be set in train this financial year. {:#subdebate-62-16} #### Care and Education of Young Children In February 1973 the Australian Government announced the appointment of an Australian Pre-schools Committee to inquire into and make recommendations concerning financial assistance to the States, local government authorities and voluntary non-profit-making institutions, for the establishment and operation of pre-schools and child care centres. An amount of $10.0 million was included in the 1973-74 Budget in advance of the report and recommendations of the Committee so that a start could be made on the program as early as possible in 1974. Separate expenditure was incurred under the *Child Care Act* 1972 to assist in the construction and operation of child care centres. The Committee presented its Report in November 1973 and the Government invited comments from interested bodies and asked the Social Welfare Commission, in collaboration with the Pre-schools Committee, the Priorities Review Staff and other government agencies to consider the development of pre-school and child care facilities from the welfare standpoint. After considering the reports, the Government has now decided to provide $75 million in 1974-75 to enable a start to be made, no later than 1 January 1975, on a new program for the care and education of young children, and to meet commitments under the existing program. The new program involves a fully integrated approach to the needs of childhood, embracing education, health and care services. An Interim Children's Committee is to be established, pending the establishment of a Children's Commission, to assume responsibility for administering all existing commitments and for developing the new program. {:#subdebate-62-17} #### Student Assistance From the beginning of 1975 the Government will increase the maximum allowance payable under the Secondary Allowances Scheme, and relax the means test. It is expected that these measures will cost $0.7 million in 1974-75, and the total cost of the scheme will be $3.4 million. {:#subdebate-62-18} #### Special Groups Assistance by the Australian Government for the education of special groups is estimated to increase from $46.8 million in 1973-74 to $68.3 million in 1974-75. {:#subdebate-62-19} #### Aboriginal Education Assistance is provided under the Aboriginal Secondary Grants Scheme to all full-time students of Aboriginal descent attending an approved secondary school or class. Allowances payable under this scheme were increased from 1 July 1974 to allow for movements in costs; these increases plus the normal growth in the scheme are expected to increase expenditure from $6.1 million in 1973-74 to $7.7 million in 1974-75. The Aboriginal Study Grants Scheme provides, in the main, for assistance to Aboriginal students taking courses at universities, teachers colleges and technical, business and agricultural colleges. Benefits payable under this scheme were increased from 1 July 1974 and are to be increased again from 1 January 1975 to allow for movements in costs. Expenditure in 1974-75 is expected to be $1.3 million compared with $0.9 million in 1973-74. The Australian Government has direct responsibility for the education of Aboriginal children in the Northern Territory and, in accordance with its intention of preserving Aboriginal languages and cultures, has introduced a program under which Aboriginal children living in Aboriginal communities receive primary education in their own language and instruction in traditional Aboriginal arts, crafts and skills. Provision of $5.7 million is made in the Budget for grants to the States and to non-government organisations (excluding missions) for Aboriginal education purposes in 1974-75. These grants will finance the construction and equipping of pre-schools and primary and secondary schools. In addition, expenditure will be incurred on a substantial number of programs of special assistance for schools with high Aboriginal enrolments; and vehicles and portable schools are to be provided to support educational services at Aboriginal 'outstations'. The Government has undertaken a program to upgrade all schools in Aboriginal communities and at mission stations. Total assistance for Aboriginal education under these various arrangements is estimated at $32.6 million in 1974-75, $11.8 million or 57 per cent more than in 1973-74. {:#subdebate-62-20} #### Migrant Education Expenditure on special English language instruction for migrants in 1974-75 is estimated to cost $20.4 million, an increase of $6.1 million or 42 per cent on 1973-74. Under the *Immigration (Education) Act* 1971, the Australian Government provides special instruction to assist migrant children with English language difficulties so that they may join fully in normal classes. Funds are provided to government and non-government school authorities for special language teaching equipment and for the salaries of special teachers. Estimated expenditure on child migrant education is $12.1 million in 1974-75, an increase of $3.8 million on 1973-74. Adult migrant education in the English language is conducted in special courses. Expenditure, including salary and administrative costs and living allowances for some students is estimated at $5.8 million in 1974-75, an increase of $1.6 million on 1973-74. Provision of $2.5 million is also made for demountable classroom accommodation for child migrant classes in government and non-government schools in 1974-75. {:#subdebate-62-21} #### Soldiers' Children Education Scheme This scheme provides for the payments of fees, fares and allowances and for the provision of books and equipment for the tertiary education and training of children of ex-servicemen who died as a result of their war service or who are either totally and permanently incapacitated or blind. Allowances are paid in respect of children attending secondary schools. The cost of this scheme in 1974-75 is estimated to be $3.6 million. {:#subdebate-62-22} #### Isolated Children The Government has decided to relax the means test applying to the payment of additional boarding allowances and supplementary allowances, and to increase the maximum supplementary allowance as from January 1975. The estimated cost of this scheme in 1974-75 is $11.6 million compared with $8.2 million in 1973-74. {:#subdebate-62-23} #### General Administrative and Other Expenditure General administrative and other expenditure of the Department of Education is estimated to increase by $5.4 million in 1974-75 to a total of $19.2 million, in line with the Department's increased responsibilities. The increase includes $3.6 million for salaries, $0.8 million for the Curriculum Development Centre and $0.4 million for increased support of research in education. {:#subdebate-62-24} #### Indirect Assistance Through Taxation In addition to the outlays on education discussed above, indirect assistance is provided through the taxation system by way of concessions granted to taxpayers under the income tax and sales tax laws. The cost of the income tax deductions for education (including self-education) expenses in terms of revenue forgone is estimated at $130 million in respect of the income year 1972-73, the latest year for which figures are available. The maximum deduction allowed for education expenses in the 1972-73 income year was $400 for self-education expenses and $400 for each child of the taxpayer and dependant under 25 years. Where two or more taxpayers were entitled to a deduction for education expenses in respect of one student, the aggregate amount allowed was limited to $400. {: type="1" start="3"} 0. HEALTH The Government plans to introduce the universal health insurance program in 1975-76. In the meantime the present health insurance scheme will be maintained. Government support of the scheme in 1974-75 is presently estimated to cost $415.9 million. For 1974-75 significantly higher allocations have been made to the community health program and the free dental scheme for school children. In addition, new initiatives to be introduced in 1974-75 include: assistance for the provision of additional public hospital and other health institutional facilities in the States; e the provision, without charge, of stoma appliances and home dialysis equipment and supplies; © the financing of approved deficits of religious and charitable nursing homes; « the provision of free hospital and medical treatment for all ex-servicemen and women who were prisoners of war; the extension of free hospital and medical treatment to ex-members of the Forces suffering from malignant cancer who did not serve in a theatre of war. Direct outlays from the Budget on health are estimated to rise from $947.7 million in 1973-74 to $1,232.1 million in 1974-75, an increase of 30.0 per cent. Estimated outlays on health are equivalent to 7.6 per cent of total estimated outlays in 1974-75. The total cost of Government assistance in the health field includes revenue forgone from various taxation concessions. The cost of these concessions, in terms of revenue forgone, for the 1972-73 income year, the latest year for which data are available, is estimated at $245 million, made up as follows: Details of actual outlays on health in 1972-73 and 1973-74, together with estimated outlays in 1974-75 are shown in the following table: {:#subdebate-62-25} #### Medical Services and Benefits {:#subdebate-62-26} #### Medical Benefits - General Under the present voluntary health insurance scheme, the Government provides benefits for medical services rendered to contributors to registered medical insurance funds and to their dependants. The rates of Government and fund benefits are related to the fees for medical services and are set out in the Schedules to the National Health Act. In respect of some insured patients (known as 'Special Account' contributors) whose medical and hospital claims would otherwise be disallowed because of fund rules relating to pre-existing ailments, chronic illness or maximum benefits, the Australian Government reimburses the funds for any losses incurred in providing benefits. To assist families with incomes of $68.50 a week or less, the Government meets, under the Subsidised Health Benefits Plan, the cost of medical insurance benefits and hospital insurance benefits to cover public ward treatment. This entitlement applies also to unemployment and sickness beneficiaries and to migrants for a period of two months after arrival in Australia. Graduated assistance is provided to families with incomes exceeding $68.50 a week but not exceeding $77.50 a week. Expenditure on general medical benefits is expected to reach $185.0 million in 1974- 75, an increase of $21.6 million on expenditure in 1973-74. The increase reflects, in the main, a recovery in the rate of claims for reimbursement by the funds, an increase in utilisation of medical services and greater use of higher cost services. {:#subdebate-62-27} #### Medical Benefits - Pensioners The Government meets the cost of general practitioner surgery consultations and home visits for pensioners enrolled in the Pensioner Medical Service (and their dependants). These costs are expected to increase by $12.8 million in 1974-75 to $48.2 million mainly as a result of an increase in fees payable from 1 July 1974 to doctors enrolled in the Service. {:#subdebate-62-28} #### Diagnostic Services This item covers the running costs of the Australian Government Health Laboratories, which provide a free pathology service to hospitals and medical practitioners, and the cost of supplying radio-active isotopes by the Australian Radiation Laboratory to hospitals and medical practitioners. The cost of these services is estimated to increase by $3.5 million in 1974-75 to $14.5 million. *Treatment and Allowances for Ex-servicemen and Women* The Government meets the costs for eligible persons of specialist, local medical officer, paramedical and dental services, of providing and maintaining surgical aids (including spectacles) and of travelling expenses for the purpose of medical treatment. Expenditure on these services in 1974-75 is expected to increase by $4.7 million of which $3.2 million is due to increased fees for local medical officers and specialists. The 1974-75 estimate includes $1.0 million ($1.5 million in a full year) to meet the cost of extending eligibility for treatment for all disabilities to all Australian exservicemen and women who were prisoners of war and for malignant cancer to exmembers of the Forces who did not serve in a theatre of war. {:#subdebate-62-29} #### Hospital Benefits - General Under the voluntary health insurance scheme, the Government provides a benefit of $2 a day for in-patients insured against the cost of hospital treatment. Uninsured patients receive a Government benefit of 80 cents a day. In cases where no charge is made by a hospital, a benefit of $2 for each qualified in-patient day is paid direct to the hospital. The cost of Government hospital benefits is expected to increase by $27.5 million in 1974-75 to $117.0 million. The increase reflects mainly a greater number of beddays qualifying for Government benefits and higher payments flowing from increased hospital charges, to funds for 'Special Account' contributors and beneficiaries under the Subsidised Health Benefits Plan. {:#subdebate-62-30} #### Hospital Benefits - Pensioners Under an arrangement with State Governments, pensioners enrolled in the Pensioner Medical Service are entitled to free public ward hospital treatment. The Government makes a payment of $5 for each pensioner bed-day towards the cost of this treatment. The cost of this scheme is expected to increase by $2.7 million in 1974-75 to $27.0 million. *Treatment for Ex-servicemen and Women* Hospitals and clinics are maintained in each State for the treatment of eligible ex-servicemen and women and dependants. Use is also made of State public hospitals where appropriate. The cost of this treatment (including capital outlay) is expected to increase by $16.6 million in 1974-75 to $88.1 million. The main component is the salaries and allowances for staff employed in Repatriation institutions, which are estimated to rise by $7.9 million in 1974-75 to $53.2 million, largely due to wage determinations. Capital expenditure, including repairs and maintenance of Repatriation institutions, is expected to increase by $6.0 million to $13.6 million in 1974-75. Provision has also been made for the extension of eligibility for hospital treatment for all disabilities to ex-servicemen and women who were prisoners of war and to ex-members of the Forces suffering from malignant cancer who did not serve in a theatre of war. This initiative is expected to cost $0.6 million in 1974-75 and $0.9 million in a full year. {:#subdebate-62-31} #### Mental Health Facilities During the period 1955-56 to 1973-74 the Government reimbursed State Governments one-third of the capital costs of new mental health institutions on which approved expenditures were incurred before 30 June 1973. Arrangements for assistance for non-residential mental health facilities are described under the heading Community Health Facilities and Services, and new arrangements for assistance for residential mental health facilities are described under the heading Hospitals Development Program. Other expenditures under this item include an annual payment to the New South Wales State (Government for the cost of maintaining residents of the Australian Capital Territory who are receiving psychiatric treatment and the cost of medical care and treatment for eligible ex-servicemen and women at State mental hospitals. *Hospitals in the Territories* The Canberra Hospitals Management Board operates two hospitals in the Australian Capital Territory and the Department of Health operates five hospitals and a leprosarium in the Northern Territory. It is proposed that as from 1 December 1974 control of the hospitals in the Australian Capital Territory will be transferred to the Capital Territory Health Commission. Net expenditure on hospital services in the Territories is expected to increase by $22.7 million in 1974-75 to $57.3 million. The increase reflects a 31 per cent increase in the operating costs of hospitals and a large building program in both Territories. In the Australian Capital Territory, capital expenditures will include progress payments on a 300 bed hospital for the Order of the Little Company of Mary and the construction of a centralised hospital services facility. Higher capital expenditures in the Northern Territory will reflect redevelopment of the Alice Springs Hospital and construction of a new hospital in Darwin. {:#subdebate-62-32} #### Hospitals Development Program The Government has considered the recommendations of the Hospitals and Health Services Commission in its report 'Hospitals in Australia', April 1974. As announced in the Budget Speech, funds of $28 million will be provided in 1974-75, the first year of a five-year program, for the provision and modernisation of public hospital and other residential health facilities, such as mental institutions, hostels for the mentally ill, nursing homes and hostels for the physically infirm. Except where it is concluded that the Government's contribution can best be made by constructing a facility, the funds will be provided to the States on a grant basis. {:#subdebate-62-33} #### Pharmaceutical Services and Benefits {:#subdebate-62-34} #### Pharmaceutical Benefits - General and Pensioners Except for a flat charge per prescription which is payable by patients, the Government meets the cost of a range of drugs and medicinal preparations supplied on a doctor's prescription to any person in the community. The patient contribution is $1 per prescription, except for persons eligible to receive assistance under the Subsidised Health Benefits Plan where the contribution is 50 cents, and for persons enrolled in the Pensioner Medical Service and their dependants where no contribution is payable. Expenditure on pharmaceutical benefits for the general population is estimated to increase by $24.0 million in 1974-75 to $175.5 million. Of the increase, $6.1 million reflects increases in dispensing fees for chemists, including retrospective payments (the full-year cost is $4.4 million). Increases in population and utilisation and changes in prescribing patterns account for the remainder. Expenditure on pharmaceutical benefits for eligible pensioners is estimated to increase by $6.9 million in 1974-75 to $73.7 million. The additional outlay results from increases in chemists' dispensing fees, including retrospective payments, amounting to $2:8 million (the full-year cost is $2.0 million) and increases in numbers and utilisation. *Pharmaceutical Benefits - Ex-servicemen and Women* The Government meets the full cost of drugs and medicinal preparations supplied on a doctor's prescription for eligible ex-servicemen and women and dependants. The cost of these benefits is expected to increase by $1.6 million in 1974-75 to $22.8 million. The main component in the increase is the extension of free benefits to ex-servicemen and women who were prisoners of war and to former members of the Forces suffering from malignant cancer who did not serve in a theatre of war. These measures are estimated to cost $1.1 million in 1974-75 and $1.7 million in a full year. {:#subdebate-62-35} #### Nursing Home and Domiciliary Nursing Care Services and Benefits {:#subdebate-62-36} #### Nursing Home Benefits and Payments A benefit of $3.50 a day is payable to all patients in nursing homes, with a supplementary benefit of $3.00 a day for those patients requiring intensive care. As from 1 January 1973, the Government has paid an additional benefit, related to fees in each State, for pensioners enrolled in the Pensioner Medical Service, and an equivalent fund benefit has been paid to insured patients. With effect from 1 August 1974 the additional benefit was increased in line with the increase in fund benefit, at an estimated cost in 1974-75 of $24.6 million. As announced in the Budget Speech it is proposed to amend the National Health Act to authorise the Minister to offer to meet approved deficits, after receipt of patient contributions, of nursing homes conducted by religious, charitable and other nonprofit organisations. The estimated additional cost of the measure in 1974-75 is $1.8 million and in a full year $3.5 million. Estimated expenditure on nursing home benefits in 1974-75 is $112.3 million. Financing of deficits of eligible organisations in 1974-75 is estimated to cost $34.8 million. {:#subdebate-62-37} #### Domiciliary Nursing Care Benefits Subject to certain criteria being met, the Government pays a benefit of $2 a day to persons who arrange for the provision of nursing care for elderly relatives at home. The benefit was introduced on 1 March 1973. Expenditure on the benefit is estimated to increase by $1.3 million in 1974-75 to $7.6 million as a result of an increase in utilisation. *Nursing Home and Domiciliary Nursing Care for Ex-servicemen and Women* The Government meets the full cost of nursing home accommodation required by ex-servicemen and women because of service-related disabilities. Certain other categories of ex-servicemen and women, including chronically ill war widows, may be assisted with the cost of nursing home accommodation for disabilities not due to war service, on the same basis as nursing home patients enrolled in the Pensioner Medical Service. Free domiciliary care services are provided to these groups as required. Expenditure on nursing home and domiciliary care for eligible persons is expected to increase by $5.6 million in 1974-75 to $16.5 million. Of this increase, $4.7 million is due to the full-year effect of widened eligibility criteria approved in 1973-74 together with increased nursing home charges. The extension of eligibility to ex-servicemen and women who were prisoners of war and to ex-members of the Forces suffering from malignant cancer who did not serve in a theatre of war is estimated to cost $0.7 million in 1974-75 and $1.1 million in a full year. {:#subdebate-62-38} #### Other This item includes grants to the States to assist in providing nursing home accommodation for aged persons of limited means, and subsidies to non-profit organisations that provide home nursing services. The estimated increase of $1.3 million includes two new initiatives announced in the Budget Speech. The Government has approved a special grant of $1.2 million, on a dollar-for-dollar basis, to Queensland for the erection of Stage 2 of the public nursing home complex at Wynnum; $300,000 has been provided for 1974-75. The Government has also approved an increase, with effect from 1 October 1974, in the existing subsidy to approved organisations providing home nursing services. For organisations established before September 1956, the annual Australian Government payment for each nurse who attracts subsidy will be increased from $4,700 to $6,200. For organisations established after that date, the annual subsidy for each nurse employed will be increased from $2,350 to $3,100. As at present, the Australian Government subsidy to any organisation will not exceed that paid to the organisation by a State. The increase in the subsidy is expected to cost $613,000 in 1974-75. {:#subdebate-62-39} #### Community Health Facilities and Services The Government is providing assistance to the States, local government authorities and other eligible organisations for the provision of community-based health services. Expenditure under the program is estimated to increase by $25.1 million in *1974-75* to $35.0 million. In addition, grants to the States and institutions for planning and research purposes are estimated to amount to $1.0 million in 1974-75. The *Mental Health and Related Services Assistance Act* 1973 authorises grants to the States and local government authorities for the development of facilities - other than in-patient facilities - for treating mental illness, alcoholism and drug dependency. The grants meet the capital costs of approved facilities, including non-residential and hostel facilities and the maintenance costs of approved non-residential services, including expenditure on preventive programs, research and evaluation. The Act also authorises, on the recommendations of the States, grants towards the capital and maintenance expenditure of voluntary organisations involved in the fields of alcoholism and drug dependency. Expenditure under the Act is estimated to increase by $0.8 million in 1974-75 to $7.5 million. {:#subdebate-62-40} #### Treatment and Prevention of Tuberculosis Under the *Tuberculosis Act* 1948, the Government reimburses the States for capital expenditures on facilities for the treatment of tuberculosis, and for maintenance expenditure on the diagnosis and treatment of tuberculosis to the extent that the maintenance expenditure is in excess of the States' maintenance expenditure in 1947-48. The Government also extends allowances to persons suffering from tuberculosis and their dependants. These allowances were increased with effect from 8 August 1974. Expenditure on the treatment and prevention of tuberculosis is estimated to increase by $0.9 million in 1974-75 to $13.9 million. {:#subdebate-62-41} #### Health Schemes for School Children Under agreements with the States the Government reimbursed them for the cost of supplying one-third of a pint of milk each day of the school year to children under 13 years of age. The scheme ceased on 31 December 1973 but an estimated $50,000 will be paid to States in 1974-75 for expenditure incurred before 31 December 1973. The Government is establishing, in co-operation with the States, an Australia-wide school dental scheme. The aim is to provide a free dental service to all primary school children by 1980, and subsequently, to pre-school and secondary school children under 15 years of age. The Government is meeting the capital and running costs of training facilities as well as the capital costs and 75 per cent of the running costs of clinics. Expenditure on the scheme is estimated to increase by $13.6 million in 1974-75 to $21.3 million. Health Services in the Territories In the Australian Capital Territory and the Northern Territory the Australian Government provides health services of the type provided elsewhere in Australia by State and local government authorities. These services include public health activities, ambulance services and community health centres. The cost of these services is estimated to increase by $5.6 million in 1974-75 to $17.6 million. {:#subdebate-62-42} #### Health Services For Aboriginals The main item under this heading is grants to the States for Aboriginal health services. These grants, which are estimated to increase by $3.1 million in 1974-75 to $11.4 million, will provide additional hospital facilities, clinics, health centres, doctors and nurses in areas of higher Aboriginal population. Provision is also made for the development of programs of health education and preventive medicine. {:#subdebate-62-43} #### Other Health Services {:#subdebate-62-44} #### Medical Research Grants Through the medical research program of the National Health and Medical Research Council, the Australian Government assists the medical research activities of Australian and State Government departments, universities and institutions, and of individual research workers, and the training of medical research workers. The increase of $1.3 million in 1974-75 to $6.0 million mainly reflects increases in academic and non-academic salaries. {:#subdebate-62-45} #### Commonwealth Serum Laboratories Commission The main functions of the Commonwealth Serum Laboratories Commission are to produce and sell biological products, undertake research into the production of therapeutic biological products and hold stocks of biological products. The total provision of $5.9 million for 1974-75 is $4.5 million higher than for 1973-74. The Government has announced its intention to establish a separate Pharmaceutical Corporation, alongside the Commonwealth Serum Laboratories Commission, to acquire a non-biological production unit with a view to the later amalgamation of the two bodies. No funds have been provided for this purpose in the Budget. {:#subdebate-62-46} #### Aids and Appliances For 1973-74 this item represented the costs of supplying, without charge, hearing aids (and batteries) to children, eligible pensioners and their dependants, and artificial limbs to civilians. As announced in the Budget Speech, it is intended to introduce legislation in 1974-75 to authorise the supply, without charge, of stoma appliances and home dialysis equipment and supplies to all persons in the community who need them. The estimated cost of these measures in 1974-75 is $1.2 million and in a full year $1.8 million. {:#subdebate-62-47} #### Educational Campaigns The Government sponsors two educational campaigns in the health field - the National Drug Education Program and the Anti-Smoking Campaign. Since 1970-71 the Australian Government has provided funds to support State and National projects of drug education; $750,000 has been allocated for the program in 1974-75. The National Education Campaign on Smoking was launched in 1972. Under this program, up to $500,000 for each of the three years to 1974-75 has been allocated for the purposes of disseminating information on the health hazards of smoking. To reinforce this educational campaign, the Government has decided that advertising of cigarettes and cigarette tobacco on television and radio will be phased out over three years. {:#subdebate-62-48} #### Blood Transfusion Service and Products The Australian Government meets 35 per cent of the annual operating cost of the Red Cross Society's Blood Transfusion Service in the States and 95 per cent in the Territories. Blood collected by the Society's Transfusion Service is processed into blood fractions, plasma and serum by the Commonwealth Serum Laboratories Commission. The blood products are supplied, free of charge, to hospitals and approved pathologists for use in medical diagnosis and treatment. The Australian Government reimburses the Commission for the cost of processing the blood. The Government's contributions are estimated to increase by $0.6 million in 1974-75 to $3.9 million. {:#subdebate-62-49} #### Quarantine Services Human, animal and plant quarantine measures are enforced mainly to prevent the introduction of exotic diseases into Australia. By arrangement, the States administer animal and plant quarantine with costs being reimbursed by the Australian Government. Human quarantine is administered by the Australian Government. To encourage the safe disposal of overseas ships' garbage, the Australian Government has met the whole cost of providing incinerators and ancillary structures at selected ports and has shared with the States half the cost of access roads. Quarantine services in 1974-75 are expected to cost $6.3 million, $1.5 million more than in 1973-74. {:#subdebate-62-50} #### Other This item includes the cost of the Australian Government's annual subsidy to the Royal Flying Doctor Service (which, as announced in the Budget Speech, has been increased by $327,000 to $966,000 a year), subsidies towards the cost of certain international health conferences, and administrative expenditures related to public health and the administration of the Therapeutic Goods Act. {:#subdebate-62-51} #### General Administration This item comprises the general administrative and capital expenses of the Department of Health, the Department of Social Security (in respect of health insurance), the Hospitals and Health Services Commission and the Health Insurance Commission. The estimated increase in administrative expenses of $17.2 million in 1974-75 to $42.6 million includes the full-year effect of salary and other cost increases in 1973-74 and the administrative and capital costs of the Health Insurance Commission. {:#subdebate-62-52} #### Recoveries Recoveries include the charges met by certain countries for treatment given to their ex-servicemen through Repatriation facilities. {: type="1" start="4"} 0. SOCIAL SECURITY AND WELFARE The Australian social security system is designed to protect people from economic hardship caused by events such as loss of earnings through age, invalidity, sickness, unemployment or the loss or absence of a supporting male as a result of death, desertion or long-term separation. It is designed also to compensate ex-servicemen for war-caused disabilities and the dependants of those whose deaths are war-related and to assist parents with the expenses associated with bearing and raising children. Much of this assistance is provided by way of cash benefits. There are selective, or means-tested, benefits such as invalid and widows pensions and unemployment benefits, as well as universal benefits such as maternity allowances and child endowment. Additionally, assistance is provided, either directly or through State and local government authorities and voluntary agencies, for a wide range of welfare services for people with special needs. For example, the aged are assisted with their accommodation needs and invalids may be trained so that they can re-enter paid employment. Assistance is also provided in a variety of forms for the advancement of Aboriginals. Total direct outlays on social security and welfare are estimated to increase from $2,489.1 million in 1973-74 to $3,441.5 million in 1974-75, an increase of 38.3 per cent. Direct outlays on social security and welfare in 1974-75 are equivalent to 21.1 per cent of estimated total Budget outlays. In addition to these direct outlays on social security and welfare, indirect assistance is provided in the form of concessions in the income tax and sales tax laws. The cost of the income tax concessions, in terms of revenue forgone, is estimated at $804 million for the income year 1972-73, the latest year for which figures are available. Details are set out below: $ million Maintenance of dependants and housekeepers . . . . 430 Superannuation contributions, life assurance premiums, etc., by individual taxpayers (a) . . . . . . 365 Age allowance . . . . . . 9 804 {: type="a" start="a"} 0. This is the estimated cost of the relevant income tax deductions allowed to taxable individuals. It does not take account of any income tax payable on superannuation pensions received subsequently by contributors. **Major reforms** to the social security and welfare system have been announced or are in prospect. As announced in the Budget Speech, the Australian Government has endorsed in principle the compensation scheme contained in the Report of the National Committee of Inquiry into Compensation and Rehabilitation in Australia (the Woodhouse Report) and the main enabling legislation will be introduced in the Budget session of Parliament. The Report recommends a delay of 18 months between the enactment of the necessary legislation and the introduction of the scheme. Following detailed examination of the scheme, amendments may be made before implementation. The full implementation of the recommendations of the Woodhouse Report would constitute the most far-reaching single social measure in the history of Australia. All Australians would be eligible to receive earnings-related benefits during periods of significant incapacity arising out of injury (including congenital disability) or sickness. In the event of death there would be earnings-related compensation and other benefits for dependent survivors. The Australian Government favours a phased introduction of the scheme. This will facilitate the development of the necessary administrative capacity and rehabilitation facilities. It will also reduce the budgetary impact in the early years of the scheme. The Treasurer is to consider how the revenue necessary to finance the scheme is to be raised and the impact of the scheme on the insurance industry. During 1974-75 the Government expects to receive the reports of three other major inquiries. These could have a significant effect on the development of the Australian social security and welfare system. Final reports are expected from the Commission of Inquiry into Poverty and the National Superannuation Committee of Inquiry. The report of the Independent Inquiry into the Repatriation System is also expected during 1974-75. Details of actual outlays on social security and welfare in 1972-73 and 1973-74, together with estimated outlays in 1974-75 are shown in the following table: Assistance to the Aged {:#subdebate-62-53} #### Pensions and Allowances Age pensions are payable, free of means test, to residentially qualified men and women aged 75 years or more. Age pensions are payable, subject to a means test on income and property, to residentially qualified women aged 60 to 74 years and to residentially qualified men aged 65 to 74 years. To be residentially qualified for age pension, a period of ten years continuous residence in Australia is usually necessary. The means test was to be abolished for those aged 70 to 74 years from the Spring of 1974 and for those aged 65 to 69 years from the Spring of 1975. As announced by the Treasurer in his statement to Parliament on 23 July the Government is proceeding with the abolition of the means test for those aged 70 to 74 years, with effect from April 1975. Wife's pension is payable to an age pensioner's wife who does not qualify for an age, invalid or repatriation service pension in her own right. The pension is subject to a means test. Additional payments are available to pensioners with dependent children. These payments are subject to a means test. Supplementary assistance is payable, subject to a special means test, to pensioners who are required to pay rent or lodging charges. As announced in the Budget Speech, the amount of supplementary assistance payable is not to exceed actual rent paid. Upon the death of one of a married pensioner couple, the surviving member may become entitled to receive, for up to six fortnightly instalments, the equivalent of the two pensions that would have been paid if the spouse had not died. All pensions, excluding supplementary assistance and additional payments for children, payable to persons of age pension age under the social security legislation and wives of age pensioners, are subject to tax. The special tax rebate arrangement, introduced in 1973-74 as a transitional measure to ensure that, generally, pensioners were not made worse off as a consequence of the taxation of pensions, will begin to be phased out. For the 1974-75 income year the transitional age rebate will be reduced from $156 to $130. The existing and proposed maximum rates of the above benefits are set out below. Because of the effect of inflation on pensions and the lateness of the Budget this year, the standard and married rates of pension were increased early in August 1974. The standard (or single) rate was increased by $5.00 a week and the married rate by $3.00 a week. The rates of pension will be further reviewed in Autumn 1975. The estimated cost of the proposed increases in benefits is $6.2 million in 1974-75 and $7.8 million in a full year. The estimated cost of abolition, as from 1 April 1975, of the means test for residentially qualified men and women aged 70 to 74 years is $25 million in 1974-75 or about $100 million in a full year. The average number of age pensioners (including women in receipt of wife's pension) in 1973-74 was 1,002,500; in 1974-75 the number is estimated to increase by 82,600 to 1,085,100. The main factors contributing to this increase are the abolition of the means test for persons aged 75 years or more announced in last year's Budget, normal' growth, and the fact that about 53,500 persons are estimated to become age pensioners as a result of abolition of the means test for residentially qualified men and women aged 70 to 74 years from the Autumn of 1975. The average amount of age pension (including additions for children and supplementary assistance) is estimated to rise from $22 a week in 1973-74 to $28 a week in 1974-75, an increase of about 27 per cent. The main reasons for this are the recent increases in pension rates, the full-year effects of increased rates of pension introduced during 1973-74 and the abolition of the means test for residentially qualified men and women aged 75 years and over, and the proposed abolition of the means test for residentially qualified men and women aged 70 to 74 years from Autumn 1975. {:#subdebate-62-54} #### Aged Persons Accommodation The *Aged Persons Homes Act* 1954-1973 is designed to encourage and assist organisations to provide suitable homes in which aged people may live in conditions approaching as nearly as possible ordinary domestic life. The Government makes grants on a $2 for $1 basis to religious and charitable organisations and local governing bodies towards the cost of erection, extension or purchase of homes for the aged. It is proposed to widen the scope of the Act so that handicapped adults may be accommodated in subsidised homes. It is also proposed that grants be made on a $4 for $1 basis instead of on a $2 for $1 basis. The Government pays a personal care subsidy to eligible organisations for persons aged 80 years or over and other residents who require, and are receiving, approved personal care while living in hostel-type accommodation provided by those organisations. It is proposed to increase the rate of subsidy from $12 a week to $15 a week. Expenditure under the Act is estimated to be $30.8 million in 1974-75, $8.4 million more than in 1973-74. Of this increase, $2.9 million is attributable to the proposed increase in the Australian Government's contribution to the capital cost of aged persons homes and to the proposed increase in the rate of personal care subsidy. The *Aged Persons Hostels Act* 1972 is designed to encourage, over a three-year period, the provision of hostel accommodation for the aged. Subject to certain conditions, the Australian Government meets the cost of providing additional hostel accommodation by eligible organisations. Accommodation provided under the Act must be allocated strictly on the basis of need and without any contribution from the prospective resident. It is proposed to increase the maximum capital grant under the Act from $7,800 to $9,000 a unit with effect from 1 April 1974. Expenditure under the Act is estimated to be $15.0 million in 1974-75, $11.1 million greater than in 1973-74. Under the *States Grants (Dwellings for Aged Pensioners) Act* 1969 grants totalling $25 million were made available to the States over the five financial years ending 1973-74 for the purpose of providing self-contained dwelling units at reasonable rentals for single age pensioners .or repatriation service pensioners (receiving pensions on grounds of age) who have little or no means apart from pension. The amount was allocated among the States broadly in proportion to the relation that the number of age pensioners receiving supplementary assistance in each State bore to the total number of those pensioners in the six States. As announced in the Budget Speech, the scheme is to be extended for a further three years from July 1974, with widened eligibility conditions to include single invalid and Class B widow pensioners and single repatriation service pensioners who are permanently unemployable or suffering from tuberculosis. Grants totalling $30 million will be made available over the three-year period to be allocated among the States in proportion to the total number of age, invalid and Class B widow pensioners in receipt of supplementary assistance in each State. Rents of units provided under the extended scheme are to be not less than the maximum rate of supplementary assistance paid to pensioners. Expenditure in 1974-75 is estimated at $10 million. {:#subdebate-62-55} #### Home Care Services Under the *States Grants (Home Care) Act* 1969-1973 and the *States Grants (Paramedical Services) Act* 1969, the Australian Government provides funds, in association with the States, for the provision of a range of home care services mainly for aged persons and for the provision of senior citizens centres. Under the *States Grants (Home Care) Act* 1969-1973, the Australian Government shares on a $2 for $1 basis with the States the cost of approved housekeeping or other domestic assistance provided wholly or mainly for aged persons in their homes. The Australian Government also shares on a $2 for $1 basis with the States up to a maximum of two-thirds of the capital cost of approved senior citizens centres, as well as meeting on a $2 for $1 basis the cost of the salary of a welfare officer employed by such a centre. Grants are estimated to amount to $3.2 million in 1974-75, $1.2 million more than in 1973-74. The Australian Government shares, on a $1 for $1 basis with the States, the cost of approved paramedical services provided wholly or mainly for aged persons in their homes under the *States Grants (Paramedical Services) Act* 1969. Grants in 1974-75 are estimated at $304,000, $140,000 more than in 1973-74. The *Delivered Meals Subsidy Act* 1970-1973 is designed to assist the establishment, expansion, improvement or maintenance of approved meals-on-wheels services. The basic rate of subsidy is 20 cents a meal. An additional subsidy of 5 cents a meal is payable if the organisation undertakes to include with each meal approved kinds and quantities of fresh fruit or fruit juice. As announced in the Budget Speech, it is proposed to increase the basic rate of subsidy to 25 cents a meal. Expenditure under the Act in 1974-75 is estimated to be $1.8 million, $0.4 million more than in 1973-74. {:#subdebate-62-56} #### Other It is proposed to increase the maximum grant to the Australian Council on the Ageing by $10,000 to $150,000 for 1974-75. Assistance to Ex-Servicemen and their Dependants {:#subdebate-62-57} #### War Pensions and Allowances In general, war pensions and associated benefits are payable to an ex-serviceman and/ or his dependants where the ex-serviceman has died or been incapacitated as a result of service in the 1914-18 War, the 1939-45 War, or certain subsequent operations of a war-like nature. In addition, members of the Regular Defence Force who have had at least three years service terminating on or after 7 December 1972, or a lesser period if discharged on medical grounds, may also be eligible for repatriation pensions if the incapacity or death resulted from that service. Dependants of deceased servicemen may also qualify for benefit. For ex-servicemen, basic eligibility varies according to the nature of service. Broadly, for those with 'active service', incapacity or death resulting from 'any occurrence' during war service may be accepted. The criterion is narrower for home service, in that incapacity or death must have arisen out of, be attributable to, or have been aggravated by, that service. {:#subdebate-62-58} #### Classes of War Pnsions Ex-Servicemen: pensions are paid to eligible ex-servicemen in three main categories: o The Special Rate (known as the T & PI) Pension, payable to an ex-serviceman who, as a result of war service, is blinded, or is totally and permanently incapacitated so that he is unable to earn more than a negligible percentage of a living wage. o The Intermediate Rate, payable to an ex-serviceman who, because of the severity of his incapacity accepted as related to war service, can work only part-time or intermittently, and in consequence cannot earn a living wage. o The General Rate, payable to an ex-serviceman who has an incapacity accepted as related to war service, but is not because of that incapacity prevented from being able to work full-time. The amounts payable range from 10 per cent to 100 per cent of the maximum general rate, according to the assessed degree of incapacity. Dependants of ex-servicemen: pensions are also paid to the wives of incapacitated ex-servicemen and to dependant children. Such pensions are paid at rates varying with the assessed degree of the particular ex-serviceman's incapacity. When the death of an ex-serviceman has been accepted as related to his war service, his widow qualifies for the war widows rate of pension and for associated benefits, while his children receive pensions at 'orphan' rates and other benefits. If an ex-serviceman's death has not been accepted as related to war service, but at the time of death he was receiving, or is later adjudged to have been eligible to receive, a pension at one of the special rates or as a double amputee, his dependants qualify for pensions as if his death had been accepted as due to war service. Other dependants of deceased ex-servicemen may qualify for pensions in certain cases. Pensions in the categories available to ex-servicemen and their dependants are also paid to eligible members of the Regular Defence Force and their dependants. {:#subdebate-62-59} #### Allowances Various allowances are provided to supplement war pensions. These allowances vary according to the type or severity of disablement and the special needs of the pensioners. {:#subdebate-62-60} #### Rates of Pension and Allowances The existing and proposed rates of the main war pensions and allowances are set out below: During 1973-74 the average number of ex-servicemen and their dependants in receipt of war pensions was 540,000; for 1974-75, the number is estimated to be 525,000. The effect on expenditure of this estimated decline in numbers is more than offset by the full-year effects of increased rates of benefits introduced in 1973-74 and the increases in benefit rates announced in the Budget Speech. The proposed changes in war pensions and allowances are estimated to cost $19.3 million in 1974-75 and $40.4 million in a full year. Details are set out in the following table: {:#subdebate-62-61} #### Service Pensions Service pension may be payable: o to an ex-serviceman who served in a theatre of war and who has attained the age of 60 years or is permanently unemployable; o to an ex-servicewoman who served in a theatre of war or embarked for service abroad and has attained the age of 55 years or is permanently unemployable; o to an ex-serviceman or woman suffering from pulmonary tuberculosis irrespective of age or the area of service. Eligibility will be further widened by the proposal in the Budget Speech that exmembers of the Defence Forces of British Commonwealth Countries who served in a theatre of war and have had at least ten years residence in Australia will be entitled to service pension from Autumn 1975. A service pension is therefore a broad equivalent of an age or invalid pension. The advantages to the ex-serviceman are availability of the service pension five years earlier and, in certain circumstances, eligibility for a wide range of medical treatment services in the repatriation system. Service pensioners are eligible for the same range of pensions and allowances as age pensioners and the rates of benefit are the same. Service pensions are paid, free of means test, to eligible ex-servicemen and women aged 75 years and over; in line with the proposed abolition of the means test on age pensions, the means test on service pension for those aged 70 to 74 years will be abolished in Autumn 1975. As announced in the Budget Speech, a further 25 per cent of war pension (making 50 per cent in all) will be disregarded as income for the service pension means test from Autumn 1975. For service pensioners of age pension age (65 years and over for men and 60 years and over for women) , service pensions are subject to tax. During 1973-74, the average number of service pensioners (including wives) was 101,500; it is estimated to rise to 114,000 in 1974-75. Increased expenditure in 1974-75 is due to this increase in numbers arising from widened eligibility and normal growth, the full-year effect of pension increases granted in 1973-74 and increased rates in 1974- 75. The following table sets out the estimated expenditures in 1974-75 and in a full year resulting from the decisions announced in the Budget Speech: The standard (or single) rate of service pension was increased by $5 to $31 a week from 1 August 1974. The married rate was increased by $3 to $25.75 a week. The rates will be reviewed again in Autumn 1975. Assistance to the Handicapped {:#subdebate-62-62} #### Invalid Pensions and Allowances Invalid pensions are payable, subject to a means test on income and property, to residentially qualified persons not less than 16 years of age who are permanently incapacitated for work to the extent of at least 85 per cent or permanently blind. To be residentially qualified, a period of five years continuous residence in Australia is necessary unless the incapacity occurred outside Australia in which case the residence qualification is the same as for an age pension. It is proposed to remove the residence qualification of 5 years where a person becomes permanently incapacitated or permanently blind while residing in Australia. Invalid pensioners are eligible for the same additional payments as age pensioners and the rates of benefits are the same. Similarly, wife's pension is payable to the wife of an invalid pensioner if she is not eligible for age, invalid or service pension in her own right. During 1973-74, the average number of invalid pensioners (including women in receipt of wife's pension) was 177,300 and for 1974-75 it is estimated to be 185,300, an increase of 8,000. The average amount of invalid pension (including additions for children and supplementary assistance) is estimated to rise from $25 a week in 1973-74 to $31 a week in 1974-75, an increase of about 28 per cent, mainly because of the recent increases in benefit rates and the full-year effects of increased rates of benefit introduced during 1973-74. The estimated cost of the measures announced in the Budget Speech is $3.5 million in 1974-75 and $4.6 million in a full year. {:#subdebate-62-63} #### Handicapped Childs Allowance It is proposed to introduce a new benefit, Handicapped Childs Allowance, of $10.00 a week that will be payable to parents or guardians in respect of a child under the age of 16 years who is cared for at home and who, because of the severity of the handicap, is in need of constant care and attention. {:#subdebate-62-64} #### Sheltered Employment Allowances and Facilities Sheltered employment allowances are payable to disabled people who are qualified to receive an invalid pension or who would become so qualified if they ceased to be provided with sheltered employment. The allowance is subject to the same means test as applies to the invalid pension and the rates of benefit are the same. It is proposed to introduce a new benefit of S5 a week, Incentive Allowance, that will be paid to recipients of sheltered employment allowance. The new benefit will be paid freeofmeans test. Recipients of the incentive allowance will not be eligible for supplementary assistance. Under the *Sheltered Employment (Assistance) Act* 1967-1973, the Australian Government provides grants to religious and charitable organisations and local governing bodies on a $2 for $1 basis towards the capital cost of sheltered workshops and associated facilities for handicapped people whose disabilities prevent them from engaging in normal employment or who can only enter normal employment after lengthy periods of adjustment and training under sheltered conditions. A $2 for $1 rental subsidy is also available for up to three years. A subsidy of up to half of the salary of certain sheltered workshop and hostel staff engaged to provide special services such as expert supervision is also available. A training fee of $500 is paid to eligible sheltered workshops for each former employee who, after completing more than six months sheltered employment, graduates to and retains normal employment for 12 months or more. It is proposed to amend the Act to enable provision for: ° salary subsidies on a $1 for $1 basis for all approved staff; ® a change in the capital subsidy from a $2 for $1 basis to a $4 for $1 basis; « an extension of the capital subsidy to cover activity centres, ancillary rehabilitation and recreational facilities, furnishings, maintenance of premises and the replacement of certain equipment; ° a change in the rental subsidy from a $2 for $1 basis to a $4 for $1 basis; o an extension of the *rental subsidy to* workshops, activity centres and hostels; and o other minor changes. Expenditure under the Act is estimated to increase from $4.7 million in 1973-74 to $7.0 million in 1974-75. {:#subdebate-62-65} #### Handicapped Childrens Benefit and Facilities The handicapped childrens benefit is payable to charitable and religious organisations conducting approved homes accommodating and caring for both physically and mentally handicapped children under 16 years of age. As announced in the Budget Speech, it is proposed to increase the rate of benefit by $0.50 a day to $3.50 a day for each child at an estimated cost of $0.1 million in 1974-75 and $0.2 million in a full year. It is also proposed that the benefit continue to be paid to an eligible organisation when a child is absent from the institution for a short period only, e.g., a week-end home visit. Expenditure on the benefit is estimated to be $0.8 million in 1974-75. The *Handicapped Children (Assistance) Act* 1970-1973 is designed to augment the efforts of the States and voluntary bodies in the field of assistance to the various kinds of handicapped children. The Act provides subsidies of $2 for $1 to be paid to religious and charitable organisations and local governing bodies towards the capital cost of premises and equipment used for the training and residential accommodation of handicapped children. 'Children' includes handicapped persons who, although over 21 years, have had continuous acceptance in the institution since childhood. It is proposed to amend the Act to make provision for: e a salary subsidy on a $1 for $1 basis for staff employed at training centres and hostels; o a change in the capital subsidy from a $2 for $1 basis to a $4 for $1 basis; o an extension of the $4 for $1 capital subsidy to the maintenance of premises, replacement equipment and hostel furnishings; o the introduction of a rental subsidy on a $4 for $1 basis for training centres and hostels; o training' to include therapeutic programs; and o other minor changes. Expenditure under the Act is estimated to increase from $2.9 million in 1973-74 to $4.5 million in 1974-75. {:#subdebate-62-66} #### Rehabilitation Service The Commonwealth Rehabilitation Service is designed to restore disabled people to their fullest physical, mental, social and vocational usefulness. Treatment and training are provided free to persons in the following categories if there is a reasonable prospect of their engaging in gainful employment: o invalid pensioners; o widow pensioners; o recipients of unemployment, sickness or special benefit; o former national and regular servicemen who are disabled at time of discharge but are ineligible for rehabilitation assistance from the Department of Repatriation and Compensation; o persons receiving a tuberculosis allowance; o persons who become disabled while working for the Australian Government and who are covered by the Compensation (Australian Government Employees) Act; and o boys and girls of 14 and 15 years who would otherwise be likely to qualify for an invalid pension at 16. Expenditure (except that relating to the training scheme for widow pensioners, to be absorbed into the National Employment and Training System from 1 October 1974, which is classified to 'Economic Services - Employment Conditions') is estimated to be $7.6 million in 1974-75 compared to $6.3 million in 1973-74. {:#subdebate-62-67} #### Other It is proposed to increase the maximum grant to the Australian Council for Rehabilitation of Disabled by $17,500 to $97,500 for 1974-75. Assistance to widows and supporting mothers {:#subdebate-62-68} #### Widows Pensions and Allowances Pensions are payable to widows subject to a means test on income and property. No period of residence is necessary if a woman and her husband were residing permanently in Australia when she became a widow. In other cases, there is a residence qualification of either 5 years immediately prior to claim or ten years continuous residence in Australia at any time. The latter applies in the case of a woman whose husband died outside Australia but it is proposed to extend this to include other 'widows'. There are three classes of widows pension: Class A - A widow with one or more dependent children in her care. Class B - A widow without dependent children and at least 50 years of age or 45 years of age if her Class A pension ceased after she reached that age because she no longer had a dependent child in her care. Class C - A widow without dependent children and in necessitous circumstances within 26 weeks of her husband's death. For all classes, the term 'widow' includes a woman who was the common-law wife of a man for at least three years immediately before his death. For Classes A and B, it includes a wife who has been deserted for six months, a divorcee, a woman whose husband has been imprisoned for six months and a woman whose husband is in a mental hospital. Widow pensioners are eligible for supplementary assistance, additional pension for dependent children and mothers allowance (in lieu of guardians allowance) at the same rates as age and invalid pensioners. These payments are made subject to a means test. During 1974-75 the average number of widow pensioners is estimated to be 117,700 and the average rate of pension (including additions for children and supplementary assistance) to be S39 a week. The comparable figures for 1973-74 are 111,900 and $31 a week, respectively. The estimated cost of the measures announced in the Budget Speech is $4.1 million in 1974-75 and $5.2 million in a full year. {:#subdebate-62-69} #### Supporting Mothers Benefit and Allowances A supporting mothers benefit is paid to unmarried mothers and mothers who are deserted *de facto* wives, *de facto* wives of prisoners and separated wives. The benefit becomes payable six months after the date of the event which gives rise to eligibility (e.g. the birth of a child or separation) and it is payable at the same rate and subject to similar conditions as the Class A widows pension. Supporting mothers are also eligible for supplementary assistance, additional benefit for dependent children and mothers allowance. During 1974-75 the average number of supporting mothers is estimated to be 28,100 and the average rate of benefit (including additions for children and supplementary assistance) to be $45 a week. The comparable figures for 1973-74 are 19,300 and $40 a week, respectively. The estimated cost of the measures announced in the Budget Speech is $1.3 million in 1974-75 and $1.9 million in a full year. {:#subdebate-62-70} #### Other Under the *States Grants (Deserted Wives) Act* 1968 the Australian Government shares, within limits, on a $1 for $1 basis with the States the cost of helping certain mothers of families without a breadwinner where the mothers are ineligible for a Class A widows pension or the supporting mothers benefit. Assistance is provided during the first six months after the date of the event which gives rise to eligibility (e.g. the birth of a child or separation). The main groups of mothers assisted are deserted wives, deserting wives, wives of prisoners and unmarried mothers. After the first six months, these groups of mothers may qualify for either a Class A widows pension or a supporting mothers benefit. {:#subdebate-62-71} #### Assistance to Families {:#subdebate-62-72} #### Child Endowment Child endowment is payable, on a continuous basis, to people with children under 16 years of age or over 16 but under 21 years of age and receiving full-time education at a school, college or university and not in employment. There is no means test. Endowment is usually paid to the mother and to be eligible for endowment she must reside, or intend to reside, permanently in Australia and have the care of one or more children. Special conditions apply if the person does not intend to reside permanently in Australia. During 1974-75 the average number of endowed children (including student children) is estimated to be 4,300,000 or 6,000 more than in 1973-74. {:#subdebate-62-73} #### Maternity Allowance Maternity allowance is payable, as a lump sum, to mothers on the birth of children. There is no means test. A woman is entitled to the allowance if she resides, or intends to reside, in Australia permanently and gives birth to a child here or on board a ship travelling to Australia. Special conditions apply to a woman who is not a British subject and does not intend to reside in Australia permanently. During 1974-75 the number of grants is estimated to be 240,000. {:#subdebate-62-74} #### Other Grants are made to eligible marriage guidance organisations (estimated at $1.2 million in 1974-75) and to eligible family planning organisations (estimated at $1.1 million in 1974-75). As announced in the Budget Speech, grants to national family planning organisations are to be increased by $75,000 to $425,000 a year, and funds of $700,000 are to be provided for the provision of family planning facilities to complement, where necessary, existing public health facilities and for the training of medical personnel. Expenditure on orphans pension is estimated to be $1.8 million in 1974-75, $1.3 million more than in 1973-74. It is proposed to increase the rate of benefit by $1.00 a week to $11.00 a week at an estimated cost of $0.2 million in 1974-75. Assistance to the Unemployed and Sick {:#subdebate-62-75} #### Unemployment and Sickness Benefits Unemployment and sickness benefits are available, subject to a means test on income, to people who are unemployed or to people who are temporarily incapacitated for work and have thereby lost income. A special benefit may be paid to a person ineligible for a pension or for an unemployment or sickness benefit if he is unable to earn a sufficient livelihood for himself and his dependants. To be eligible for unemployment or sickness benefit, a person must be at least 16 years of age and under 60 (females) or under 65 years (males). He must also have lived in Australia for at least a year immediately prior to claiming benefit or intend to remain here permanently. The basic rates of benefit are the same as for age and invalid pensions. Beneficiaries with dependent children are eligible for an additional benefit for each dependent child. After receiving benefit for six consecutive weeks sickness beneficiaries are also eligible, subject to a special means test, to receive supplementary allowance of up to $4.00 a week if they pay rent. This allowance is not payable to beneficiaries in hospital who have no dependants. It is proposed to increase the maximum rate of allowance to $5 a week. The estimated cost of the measures announced in the Budget Speech is estimated to be $0.8 million in 1974-75 and $1.3 million in a full year. {:#subdebate-62-76} #### Unemployment Relief Grants Grants to the States for the relief of unemployment in non-metropolitan areas were introduced in December 1971 to reduce the level of unemployment in those areas. In December 1972 the Australian Government decided to continue the grants until June 1973. It also decided to make grants to the States, in the period January to June 1973, for the relief of unemployment in metropolitan areas. On 26 June 1973 the Prime Minister announced that the Government would make further grants under the non-metropolitan relief scheme of $S million in July, $4 million in August and S3 million in September. The scheme was then terminated. {:#subdebate-62-77} #### Structural Adjustment Assistance To assist employees displaced as a direct result of the Government's decision to reduce tariffs by 25 per cent with effect from 19 July 1973, S0.2 million was paid in the form of income maintenance in 1973-74. An expanded scheme of income maintenance has now been introduced to cover people who become unemployed as a direct result of specific action by the Government designed to bring about significant structural changes in industry that are in the national interest and that the Government judges will have effects beyond the normal adaptive capacity of the economy. This scheme provides for payments equal to a person's average weekly earnings over the previous six months, with a limit equal to li times average weekly earnings, for up to 6 months or until suitable alternative employment is obtained, whichever is the lesser period. An amount of $11.8 million is provided for this purpose in 1974-75. {:#subdebate-62-78} #### Other Welfare Programs {:#subdebate-62-79} #### Funeral Benefits A funeral benefit of up to $20 is payable to any person liable for the funeral costs of an age or invalid pensioner. A higher benefit of up to $40 is payable to an age, invalid or widow pensioner (including a woman in receipt of supporting mothers benefit) liable for the funeral cost of a spouse, a child or another such pensioner. For these benefits, 'pensioner' means a person who is, or was, entitled to Australian Government pensioner 'fringe' benefits. {:#subdebate-62-80} #### Telephone Rental Concessions A reduction of one-third in the basic annual rental for a telephone is available to pensioners and recipients of some other benefits who meet certain requirements including, in most cases, a special means test on income and property. {:#subdebate-62-81} #### Australian Assistance Plan The Australian Assistance Plan is designed to provide, on a regional basis, social planning structures to facilitate the co-ordinated development of welfare services in the community. Regional Councils for Social Development, comprising representatives of the Australian, State and local governments, trade unions, employer groups, welfare consumer groups and non-government bodies concerned with social welfare, will advise the Australian Government on the development of welfare services and on the allocation of grants and subsidies within their regions. The Australian Assistance Plan was introduced on a pilot basis in 1973-74. Grants were made to 35 bodies to cover the administrative costs involved in preparatory work to establish Regional Councils for Social Development. In addition, the six Regional Councils for Social Development involved in the full pilot program advise the Australian Government on the allocation of capitation grants to develop social welfare in their regions. As announced in the Budget Speech, it is proposed to make capitation grants available to six additional regional bodies (estimated to cost an additional $1.0 million in 1974-75); to increase the amount and number of grants available for community development officers (estimated to cost an additional $0.4 million in 1974-75); to introduce from 1 January 1975 an initiating grant of $2,000 to encourage bodies to work towards the establishment of a regional council in their area (estimated cost $0.1 million in 1974-75); and to replace, from 1 July 1974, the administrative grant by a grant for staff salaries of up to $30,000 per annum and a grant for other administrative costs of up to $10,000 per annum (estimated to cost an additional $0.4 million in 1974-75). The total cost of the Australian Assistance Plan is estimated at $6.1 million in 1974-75 compared with $0.9 million in 1973-74. {:#subdebate-62-82} #### Assistance to Homeless Persons It is proposed to make available over a three-year period, capital grants to voluntary agencies and to local and statutory authorities for approved projects (such as night shelters, reception centres and hostels) in order to upgrade and replace inadequate existing accommodation and to build new facilities for homeless persons. It is also proposed to provide a salary subsidy of 50 per cent of the salary of approved staff, an accommodation subsidy of 75 cents a person a day, and a meal subsidy of 20 cents a meal in respect of non-resident homeless persons. The program is to be reviewed on completion of the three-year period. It is estimated that expenditure in 1974-75 will be $2.2 million. {:#subdebate-62-83} #### Assistance for Migrants The Australian Government makes grants to the Good Neighbour Council, the Australian Branch of the International Social Service, and other community agencies engaged in migrant integration activities. Expenditure in 1974-75 is estimated to be $1.4 million, $0.2 million more than actual expenditure in 1973-74. {:#subdebate-62-84} #### Aboriginal Advancement Programs Nec This item includes expenditure on grants for Aboriginal community enterprises, which is expected to increase by $3.3 million to $4.0 million in 1974-75, and an amount of $1.9 million for the replenishment of the Capital Fund for Aboriginal Enterprises. Also included are grants to the States, municipal authorities and Aboriginal Councils for the development of employment opportunities for Aboriginals and support for voluntary organisations and Aboriginal communities (not elsewhere classified). In 1974-75 an amount of $11.0 million, an increase of $6.9 million over expenditure in 1973-74, is included for payment to municipal authorities and Aboriginal Councils for the development of special work projects for the employment of Aboriginals. Of this amount $4.0 million is for special work projects at Aboriginal communities in the Northern Territory which will provide Aboriginals formerly engaged under the training allowance scheme with award wages employment. {:#subdebate-62-85} #### General Administrative and Other Expenditure For 1974-75 this item comprises the general running and capital expenses of the Departments of Social Security (except those relating to health insurance where they are identifiable), Repatriation and Compensation (except those relating to repatriation institutions) and Aboriginal Affairs and the Social Welfare Commission. In earlier years other Departments were responsible for some aspects of social security and welfare general administration and other expenditure. It is proposed to increase the maximum grant payable to the Australian Council of Social Service by $100,000 to $150,000 for 1974-75. {:#subdebate-62-86} #### Allowance for Autumn Pension and Benefit Rate Increase As stated in the Budget Speech, rates of pensions and other benefits will be reviewed in Autumn 1975. An amount of $70 million is included in the Budget estimates as a contingency allowance for any increase that may arise from that review. {: type="1" start="5"} 0. HOUSING Outlays for purposes encompassed within this function are estimated to total S401.1 million in 1974-75. This estimate includes provisions for assistance to the States for welfare housing, for improvements in housing accommodation for Aboriginals, for housing in the Territories, for Defence Service Homes loans and for migrant accommodation. {:#subdebate-62-87} #### Advances to States for Housing Under the terms of the 1973 Housing Agreement negotiated with the States, the Australian Government is making advances to the States for welfare housing purposes during the five years 1973-74 to 1977-78. The advances will be repayable at low rates of interest over a 53 year period. The amount to be advanced to the States under the Agreement in 1974-75 is $235.0 million, compared with $218.6 million in 1973-74 - an increase of 7.5 per cent. In addition, some $25 million of the 1973-74 advances remained unspent at 30 June 1974 and this will be carried forward into 1974-75, making the potential *increase* in expenditure by the States in 1974-75 around 34 per cent. The Government intends to introduce legislation to amend the 1973 Housing Agreement to permit, when circumstances warrant, a higher proportion of available funds to be allocated to Home Builders' Accounts, through which loans for private home ownership are made to persons whose incomes do not exceed 95 per cent of average weekly male earnings in the previous December quarter. Further details of the Agreement are outlined in the document *Payments To or For The States and Local Government Authorities 1974-75* published concurrently with the Budget Speech. {:#subdebate-62-88} #### Grants to States for Housing The *States Grants (Housing) Act* 1971-73 authorises the provision of housing assistance to the States by way of basic grants of $2.75 million a year, payable for a period of 30 years in respect of their housing operations in each of the years 1971-72 and 1972-73. Payments in 1973-74 totalled $5.5 million; the same amount will be paid in 1974-75. A rental assistance grant of $1.25 million a year is payable in the five-year period 1971-72 to 1975-76 as a general contribution by the Australian Government towards the cost of reduced rents charged to needy families occupying housing authority dwellings. Further details of these arrangements are presented in the document *Payments To or For The States and Local Government Authorities 1974-75.* {:#subdebate-62-89} #### Australian Housing Corporation The Government proposes to introduce as soon as possible legislation to establish an Australian Housing Corporation to undertake all of those housing functions for which the Australian Government has constitutional power. This will include direct lending by the Corporation to families for housing. The sum of $25 million is being provided in 1974-75 to enable the Corporation to undertake those housing functions which are not provided for under other appropriations. {:#subdebate-62-90} #### Home Savings Grants Under the *Homes Savings Grant Act* 1964-1973, a grant is payable to eligible persons who have accumulated savings, over a period of at least three years, towards the purchase of their first home. With the introduction of a scheme of deductibility of mortgage interest to have effect from 1 July 1974 the Government has decided to end the Home Savings Grant Scheme. Grants will continue to be paid on homes contracted to be bought or built, or to be commenced by an owner-builder, on or before 31 December 1976, by persons who had already commenced to save by 21 August 1973. Expenditure on the Scheme is expected to decrease to $20.4 million in 1974-75. {:#subdebate-62-91} #### Defence Service Homes As announced in the Budget Speech, the Government has decided to increase the maximum loan under the Defence Service Homes Act from $12,000 to $15,000. The interest rate on new loans has also been reviewed; the present rate of *3i* per cent per annum on existing loans and on new loans up to $12,000 will be retained, but the interest rate on future loans on the amount exceeding SI 2,000 will be 2 per cent below the most favourable rate available from the Commonwealth Savings Bank. (Currently this would mean an interest rate of 7i per cent on this part of the loan.) Eligibility for loans will be extended to single or widowed men without dependants, and the transfer of the outstanding balance of a loan in respect of one property to another property will now be allowed in some cases. The normal maximum repayment term will be 32 years. Expenditure is expected to increase to §115 million in 1974-75. Housing in the Territories Expenditure under this item covers the construction of new houses and flats in the Australian Capital Territory and Northern Territory and advances made to individuals for home construction. Of the S26.9 million provided for dwelling construction in 1974-75, §17.3 million will be allocated to the Australian Capital Territory and §9.6 million to the Northern Territory. In 1974-75 $24.8 million will be available for first mortgage lending by the A.C.T. Commissioner for Housing, compared with §24.6 million in 1973-74. An amount of $8.5 million will be provided in 1974-75 for the Northern Territory Housing Commission, an increase of $6.8 million over expenditure in 1973-74 when adverse weather conditions retarded construction progress. An advance of $1.3 million is to be made to the Northern Territory Home Finance Trustee for on-lending on first mortgages to eligible persons to construct their own dwellings or for purchase of existing homes. An amount of $0.9 million is being provided as loans to Church Organisations for the construction of residential accommodation in the Northern Territory in 1974-75, a decrease of $0.2 million compared with expenditure in 1973-74. {:#subdebate-62-92} #### Housing for Migrants Outlays by Commonwealth Hostels on building works and equipment for migrant accommodation are expected to be $1.5 million in 1974-75, an increase of $1.0 million on 1973-74. {:#subdebate-62-93} #### Housing for Aboriginals The main items under this heading are grants to the States and to Aboriginal housing associations for the construction and purchase of homes for Aboriginal families, and payments to Aboriginal Hostels Ltd to meet the cost of acquisition and operation of hostels for Aboriginals. In 1974-75 a total of $21.3 million will be made available by way of payments to the States and $13.1 million in grants to various Aboriginal housing associations. Expenditure on the provision of hostel accommodation by Aboriginal Hostels Ltd will be increased to $8.0 million in 1974-75. {:#subdebate-62-94} #### General Administrative Expenditure The costs associated with the housing functions of the Department of Housing and Construction are expected to total $12.7 million in 1974-75, an increase of $1.6 million compared with 1973-74. {:#subdebate-62-95} #### Other Recoveries and Repayments Increased rental income in the Australian Capital Territory ($1.0 million) and the Northern Territory ($0.5 million) accounts for most of the increase of $1.7 million expected in 1974-75. The estimated increase of $1.0 million in the Australian Capital Territory arises from an increase in the number of residences occupied and the adoption of economic rental levels from 11 July 1974. The estimated increase of $0.5 million in the Northern Territory is attributable to an increase in the number of dwellings occupied and the decision to raise the maximum rent payable by public servants from $15 to $25 per week from 18 April 1974. {: type="1" start="6"} 0. URBAN AND REGIONAL DEVELOPMENT NEC AND THE ENVIRONMENT Outlays within this function, which includes some of the major programs of the Australian Government in urban and regional development and environmental protection, are estimated to total $394.4 million in 1974-75. Outlays in 1973-74 totalled $144.6 million and the increase reflects the continued efforts of the Government to improve the environment and the quality of life of the community. Details of the outlays are set out in the following table: Urban and Regional Development nec This heading brings together outlays of the Australian Government on urban and regional development which are not classified to other functions. They include financial assistance for new growth centres, Land Commissions, area improvement programs and urban rehabilitation. Initiatives in urban public transport are discussed under 'Transport and Communication' in the function 'Economic Services'. Expenditure on national parks and the national estate is classified to the function of 'Culture and Recreation'. {:#subdebate-62-96} #### Growth Centres The Budget makes provision for an amount of $80.1 million in 1974-75 for the development of various growth centres including Albury/Wodonga and Monarto, development of which commenced in 1973-74. The assistance to be provided in 1974-75 carries forward in a very substantial way the -Government's major initiatives to redirect over the longer term the distribution of employment opportunities and hence of population. The growth centres program aims to raise the amenity of urban life by encouraging the rapid development of a small number of regional growth centres to provide viable alternatives to the existing metropolitan centres, and the better organisation and management of the inevitable expansion of the existing metropolitan centres. From the overall allocation, S40 million is being provided for Albury/Wodonga. An amount of $6 million is being allocated for the Holsworthy Investigatory Project, where the Cities Commission is undertaking the planning, development and servicing of 500 residential blocks to demonstrate new social and physical planning and development arrangements. An amount of $2.8 million has been included in the estimates for the capitalisation of interest payments relating to previous advances. {:#subdebate-62-97} #### Purchase and Rehabilitation of Glebe Estate The Australian Government has acquired 700 dwellings on 19 hectares of land in Glebe from the Anglican Church at a cost of $17.5 million. An initial instalment of 10 per cent of the purchase price was paid in 1973-74; the outstanding amount was paid earlier this year. An additional $1.0 million has been provided in the Budget for the purpose of managing the first stage of redevelopment. The aims of the redevelopment will be to preserve accommodation for low-income households, to achieve a suitably broad socio-economic mix in the population of the area and to preserve the historic landscape. {:#subdebate-62-98} #### Area Improvement Programs For Area Improvement Programs an amount of $14.1 million is included in the Budget, comprising $4.6 million for the Western Regions of Sydney and Melbourne and $9.5 million for an additional eleven regions in various States. These expenditures will finance planning activities and such projects as municipal drainage schemes, improvement to waterways, management and provision of solid waste disposal systems, environmental protection, acquisition of parklands and open space, landscape design and construction, and public education activities on urban issues. {:#subdebate-62-99} #### Land Commissions An amount of $54.5 million has been provided for the Land Commissions program. This involves provision of financial assistance to the States for land acquisition for comprehensive high quality development, and servicing of land acquired (where these costs are not met from normal Government subventions) and urban renewal and development. The main aims of the program are to make land available for residential and associated uses at fair prices, and to facilitate the equitable and efficient planning and development of new urban areas. The assistance, chiefly in the form of loans, is conditional upon the establishment of Land Commissions or their equivalents to control or co-ordinate the acquisition and development of urban land. It is also conditional upon the adoption of land price stabilisation legislation with respect to the areas to be acquired. An amount of $2.4 million has been included in the estimates for the capitalisation of interest payments relating to previous advances. {:#subdebate-62-100} #### Other Urban Development and Amenities Expenditures on land acquisition and development in the Australian Capital Territory and the Northern Territory are the major items included under this heading, with $38.8 million included for the Australian Capital Territory and $17.5 million for the Northern Territory. {:#subdebate-62-101} #### Development of Aboriginal Community Amenities The estimated increase of $7.5 million shown for this item is mainly for accelerated programs of land purchase, water supply, sewerage and other facilities for Aboriginal communities. Expenditure on land purchases is expected to increase by $4.5 million, and expenditure on the provision and improvement of facilities by $2.9 million, both by way of grants to the States and to non-government bodies, and by direct expenditure by the Australian Government. {:#subdebate-62-102} #### General Administrative Expenditure This item includes the administrative expenditure of the Department of Urban and Regional Development, the Cities Commission, the Albury/Wodonga Development Corporation and the National Capital Development Commission. The increase of$6.0 million in estimated expenditure in 1974-75 reflects the very substantial increase in the involvement of the Australian Government in urban and regional development. The estimates include $4.4 million for the running costs of the Department of Urban and Regional Development in 1974-75. The Cities Commission is intended to play an important role in the provision of technical advice and assistance and in practical co-operation with the States in the new cities and related initiatives. A provision of $3.7 million has been included for expenditure by the Commission in 1974-75. During 1974-75 the Albury/Wodonga Development Corporation is expected to become fully operative and an amount of $0.3 million, representing one-third of the Corporation's administrative expenses, is to be provided by the Australian Government. The remaining shares of administrative expenditure are to be provided equally by New South Wales and Victoria. Protection of the Environment The Australian Government is associated with a wide range of activities in the field of environmental protection and conservation, ranging from environmental studies to support for national and international organisations. An amount of $250,000 is being provided as a first step in a National Air Monitoring Program and for studies leading to the establishment of a Baseline Monitoring Station in Australia as a contribution to the United Nations Environment Program. $100,000 is provided for the conduct of a campaign to increase public environmental awareness. Additional salary and administrative costs of the Department of the Environment and Conservation account for a further $1.4 million of the increase under this item. {:#subdebate-62-103} #### Sewerage and Sanitation The estimates for 1974-75 include $104.7 million for the National Sewerage Program. This is a program of financial assistance to the States to eliminate the backlog of unsewered premises in major urban areas and to rectify inadequacies in reticulation, trunk sewers, purifying stations, treatment and disposal works. The program commenced in 1973-74 in the larger cities and is being extended to include smaller cities and also certain research and planning activities in 1974-75. Outlays on this program in 1973- 74 amounted to $27.9 million. Further details of this assistance are contained in the publication *Payments To or For The States and Local Government Authorities 1974- 75.* The estimates also include an amount of $19.2 million for the construction of sewerage facilities in new areas being developed in Canberra and various centres in the Northern Territory. {: type="1" start="7"} 0. CULTURE AND RECREATION The 1974-75 Budget provides for outlays of $227.6 million, an increase of $69.2 million or 43.7 per cent, on a wide range of cultural and recreational activities. This increase reflects both new initiatives by the Government and an acceleration in the rate of growth in expenditure on ongoing activities. Details of outlays on culture and recreation since 1972-73, including estimated outlays in 1974-75, are provided in the following table and associated commentary: {:#subdebate-62-104} #### Broadcasting Services The National Broadcasting and Television Services are provided by the Australian Broadcasting Commission through transmitters operated by the Australian Post Office. Outlays on these services in 1974-75 are estimated at $137.6 million, an increase of $28.4 million on 1973-74. Apart from increases in wages and salaries and other operating costs, the increase reflects the continuation of preparations for the introduction of colour television from 1 March 1975. An amount of $14 million has been provided for expenditure on capital equipment, mainly that required for the introduction of colour television. The Commission also aims to effect improvements in the quality of programs and to increase the Australian content of its programs on television and radio. {:#subdebate-62-105} #### Australian Broadcasting Control Board The Broadcasting Control Board is responsible for the regulation and control of commercial radio and television broadcasting, and for planning the development of radio and television broadcasting services generally. {:#subdebate-62-106} #### Libraries Included under this heading are expenditures on the National Library of Australia, the Canberra Public Library Service and library services provided in the Northern Territory. Expenditure in 1973-74 included non-recurring expenditure of $1.0 million on extensions and new equipment for the National Library building. New expenditure by the National Library of Australia in 1974-75 will include $300,000 for studies and consultations associated with the proposed Australian Library Based Information Service. As announced in the Budget Speech, the Government has agreed to the allocation of $1,025 million over the next two financial years for such studies. The remaining increases are mainly due to higher running costs of the National Library of Australia. {:#subdebate-62-107} #### Australian National Gallery and Collection The allocation for the acquisition of works for, and conservation of, the National Collection has been increased to $4.6 million in 1974-75. Estimated expenditure in 1974-75 also includes a provision of $3.1 million for the continuation of construction of the National Gallery. *Assistance to the Arts* Under its new structure introduced in 1973, the Australian Council for the Arts administers programs of support for the arts through Boards responsible for theatre, music, literature, film and television, Aboriginal arts, crafts and visual arts. The amount provided for the Council's programs in 1974-75 is $20 million, an increase of $6.0 million over the 1973-74 level of expenditure. Also included under this item is an amount of $637,000 for the Public Lending Right Scheme under which payments are made to Australian authors and publishers. {:#subdebate-62-108} #### Archives The Government has established the Australian Archives, responsible to the Special Minister of State, to develop, preserve and maintain archival resources which are of national significance or of general public interest. The 1974-75 Budget provides $5.9 million for this purpose. This includes $2.4 million provided for the Australian Archives' building program. The expenditure relates, in the main, to works under construction, namely the Villawood Archives Repository (Stage 2) and the Darwin Archives Repository. {:#subdebate-62-109} #### Sporting and Recreational Facilities Expenditure on the Government's programs to facilitate and encourage community sport, leisure and recreation activities is estimated at $8.0 million in 1974-75, $4.9 million more than in 1 973-74. o An amount of $4.5 million ($3.1 million more than in 1973-74) has been provided under the Australian Government's 'Capital Assistance for Leisure Facilities' program; this includes assistance for the provision of community sports and recreation facilities, specialist sporting facilities and other leisure facilities. o Assistance to sporting organisations has been increased in 1974-75 and extended to include 'competitive recreation'; an amount of $1.15 million ($0.8 million more than in 1973-74) is provided for assistance for travel, administration, coaching and special projects. o Amounts totalling $476,500 have been included for a series of new measures in community recreation. These consist of: - - the establishment of a research program under the direction of the Australian Recreation Ministers Council to review research requirements and advise on priorities ($250,000); - initiatives designed to improve the standards of leadership in community recreation and to increase the number of professionally trained recreation leaders ($76,500); - grants for leadership and equipment for the encouragement of innovation in community recreation programs ($50,000); - a program to encourage community participation in physical recreation activities ($100,000). {:#subdebate-62-110} #### International Women's Year The Government has allocated $2 million for activities to mark the UN International Women's Year, 1975. The utilisation of these funds will be on the basis of advice received from a national advisory committee of eminent persons. It is expected that, in addition to Government activities, assistance will be provided to non-government organisations for specific projects. This amount is included under the heading 'Cultural Organisations'. {:#subdebate-62-111} #### Wildlife and National Parks The estimated expenditure of $9.9 million in 1974-75 includes $9 million by way of assistance to the States for the acquisition of land for nature conservation purposes. Also included is an amount of $381,000 to commence a National Parks and Wildlife Research Program which includes the commencement of an ecological survey of Australia and also key research into and surveys of flora and fauna, with emphasis on the protection of endangered species. {:#subdebate-62-112} #### National Estate An amount of $8 million is included in the Budget for grants to the States and National Trusts and expenditure in the Territories, on the advice of an Interim Advisory Committee on the National Estate, for the preservation and enhancement of the National Estate. The broad objective of the program is to identify, preserve and enhance land and buildings of historical or other interest as a heritage for the Australian people. Expenditure under the program will finance the acquisition of land and buildings, the restoration, preservation and enhancement of properties, and various studies related to the National Estate. The Government has agreed in principle to the establishment of a National Heritage Commission, to advise on the protection of Australian heritage property, to review and report on the progress of action taken and to advise on the allocation of funds. *Cultural and Recreational Activities in the Territories nec* Included here is a range of mainly 'State' and municipal-type expenditures relating to such activities as construction and maintenance of parks and gardens, halls, swimming pools and theatres, together with assistance to cultural organisations in the Territories. Expenditure on these activities is estimated at $10.1 million in 1974-75, $2.2 million more than in 1973-74. {: type="1" start="8"} 0. ECONOMIC SERVICES This function brings together the various services and categories of assistance provided by the Australian Government to industry and the community generally. It embraces the provision of economic infrastructure, the regulation of private sector economic activity and more direct forms of participation in economic activity. {: type="A" start="A"} 0. TRANSPORT AND COMMUNICATION The Australian Government is heavily involved in providing services in this field. Total outlays on transport and communication are estimated to increase by $251.1 million in 1974-75, to $1,120.4 million. {:#subdebate-62-113} #### Post Office The large capital program undertaken by the Post Office to meet new and improved services is financed partly from Post Office internal resources (mainly from provisions for depreciation and long service leave and any trading surplus) , and partly by interestbearing advances from the Budget. Outlays shown in the table represent only the advances from the Budget and, as announced at the June 1974 Premiers' Conference, advances in 1974-75 are to be kept at the 1973-74 level of $385 million. This represents the largest single item of Australian Government expenditure on economic services. The operational expenditure of the Post Office - estimated to exceed $1,100 million in 1974-75 - is financed by the Post Office from its own revenue and does not involve any direct call on the Budget. Further information on financial and other details of Post Office activities is contained in the White Paper entitled *Post Office Prospects and Capital Program 1974-75* presented to Parliament by the Postmaster-General. {:#subdebate-62-114} #### Wireless Telegraphy Services The Post Office administers legislation regulating the operation of radio communication stations in Australia and its territories; there are more than 185,000 licensed stations. {:#subdebate-62-115} #### Air Transport Advances by the Australian Government to Qantas Airways Limited and the Australian National Airlines Commission mainly represent the passing on of proceeds of loans raised by the Government on behalf of the airlines to assist in the financing of aircraft. New overseas loans are being negotiated in 1974-75 to assist in the financing of three B747 aircraft for Qantas and two B727-200 aircraft for TAA. Amounts repaid by the airlines in respect of past loans are in turn repaid to the lenders. Advances also include new capital provided to the airlines from time to time, but no such provisions are to be made in 1974-75. The Air Transport Group of the Department of Transport (formerly the Department of Civil Aviation) carries out many services for the civil aviation industry, including the operation and maintenance of over 100 airports and of a wide range of navigation facilities throughout Australia. As announced in June 1974, expenditure on the operation of airport and airway facilities in 1974-75 is to be limited to the same real level as in 1973-74, and actual expenditure on civil aviation capital works in 1974-75 will be held to not more than the level of expenditure in 1973-74. In addition, expenditure of $8.3 million in 1974-75 is proposed for the purchase of three new F28 aircraft to be used for in-flight testing of air navigation facilities. From 1 December 1973, the Papua New Guinea Government assumed responsibility for civil aviation matters in that country. Australia's Air Transport Group has, however, continued to provide certain services and carry out air safety functions in Papua New Guinea on an agency basis. The new arrangements are expected to result in about $9.5 million less operating expenditure for Australia in 1974-75. The expected decline in 'other recoveries' is attributable largely to the finalisation of the sale of assets to the Papua New Guinea Government. For many years, the Australian Government has paid air services subsidies in respect of 'essential' rural services to country areas and 'developmental' services in outback areas. Subsidies for 'essential' rural services ceased on 30 June 1974 and the 'developmental' services subsidies are being phased out by 30 June 1977. Further action is proposed to implement the Government's decision to increase to 80 per cent by 1977-78 the rate of recovery of the costs of providing airport and airways facilities. Air navigation charges are to be increased from 1 December 1974 by 15 per cent, the maximum increase allowable under the existing Airlines Agreements with the two major domestic airlines. Charges to general aviation will be increased by an additional 50 per cent over and above the basic 15 per cent increase. These increases are estimated to yield additional revenue of S3.9 million in 1974-75. The Air Transport Group also provides a wide variety of other services to the industry at little or no charge. It is proposed that charges for such services be introduced in 1974-75 and increased progressively in subsequent years so as to achieve full recovery by June 1977. {:#subdebate-62-116} #### Road Transport Under the *Commonwealth Aid Roads Act* 1969, the Australian Government provided grants to the States totalling 51,252 million over the five years 1969-70 to 1973-74. Following the expiry of this Act on 30 June 1974, the Australian Government announced new arrangements under which it will provide grants to the States for roads totalling 81,126 million over the three-year period 1974-75 to 1976-77. The proposed new arrangements were embodied in three Bills - the *National Roads Bill* 1974 ($400 million to meet the cost of approved construction and maintenance of national highways, export roads and major commercial roads), the *Roads Grants Bill* 1974 ($700 million), and the *Transport (.Planning and Research) Bill* 1974 ($26 million for research and planning projects in relation to both roads and urban public transport). The last of the three Bills was passed by the Parliament and given Royal Assent in August 1974. The other two Bills have been amended and are to be reconsidered by the Senate in the Budget sittings. It is intended that a total of $350 million will be made available in 1974-75. For a number of years the Australian Government has made grants and loans to the States for the construction and improvement of certain roads used for the transport of beef cattle. Grants for this purpose have now been included along with financial assistance for other road categories in the *Roads Grants Bill* 1974. In addition, it is intended that Queensland will receive a further $278,557, being the balance of funds provided for this purpose under the previous program; and an amount of $2.0 million is included in the 1974-75 Budget for the maintenance of existing roads in the Northern Territory. Expenditure in 1974-75 includes $10.1 million for roads in the Australian Capital Territory and $14.6 million for roads and highways in the Northern Territory. An amount of $4.7 million has been included in the estimates for the acquisition of equipment for the city bus service and Government car fleet in the Australian Capital Territory and $1.8 million has been included for the Central Transport Pool of the Department of the Northern Territory. {:#subdebate-62-117} #### Rail Transport An amount of $15.4 million is included in the estimates to finance the capital works and services program of the Commonwealth Railways. This includes $11.9 million for the Trans-Australian Railway and $1.2 million for the North Australia Railway. It also includes $2.0 million for the proposed Tarcoola-Alice Springs Railway, the construction of which is subject to the passage of legislation to ratify the Agreement recently signed by the Australian and South Australian Governments. As announced in the Budget Speech, the Government will be implementing a purchase program by Commonwealth Railways for high performance bogie wagons. The acquisition program provides for 500 wagons to be ordered this year and 800 in 1975-76. Outlays in 1974-75, estimated at $1.4 million, are included in the $11.9 million mentioned above. Financial assistance has been provided to the States for expenditure on various railway projects since 1951-52. Currently, assistance is being provided for completion of work on the standard gauge lines between Port Pirie and Broken Hill and from Kwinana to Kalgoorlie. An Agreement was signed by the Australian and South Australian Governments early in 1974 to enable provision of financial assistance for the construction of a standard gauge line between Adelaide and Crystal Brook. (Expenditure of the $0.9 million included in the estimates is subject to the passage of legislation to approve the Agreement.) An initial provision of $3.5 million has been included in the estimates for the construction by the Australian Government, subject to the agreement of the New South Wales Government, of a railway system radiating from Parramatta to Hoxton Park, Castle Hill and through Carlingford to Epping. An amount of $0.9 million is included in the estimates to finance the continuation of the development of a standardised design for an urban passenger train. {:#subdebate-62-118} #### Urban Public Transport Improvement As part of its broad initiatives to improve living conditions in cities, the Government is providing financial assistance to the States by way of non-repayable grants to meet two-thirds of the approved cost of projects to upgrade urban public transport systems. It is estimated that $67.5 million will be made available in 1974-75. This amount includes $39.6 million for projects for which financial assistance was to have been made available to the States last year. However, the double dissolution prevented the necessary legislation from being passed before the end of June. An amount of $27.9 million has been provided for new initiatives including, for example, electrification of sections of the Brisbane rail system and further purchases of buses and railway rolling stock. {:#subdebate-62-119} #### Shipping and Harbours An amount of $54.7 million has been included in the Budget estimates for expenditure by the Australian Coastal Shipping Commission in 1974-75, compared with only $7.0 million last year. In 1974-75 the major items in the A.N.L.'s expanded capital expenditure program are two 140,000 dwt. bulk carriers, one cellular container vessel, three general cargo vessels and two 25,000 dwt. bulk carriers. The estimates include provision of $3.75 million for expenditure on the construction of a drydock at the State Dockyard at Newcastle. The proposed drydock is to be the Australian Government's contribution to a joint Australian/ New South Wales Government Commission to run the augmented dockyard. Negotiations with the State Government are in progress. 'Other' outlays of $5.4 million in 1974-75 include $1.9 million for capital expenditure mainly by the Department of Transport on maritime navigational aids and facilities and a subsidy of $1.0 million for the 'Empress of Australia' passenger service between Tasmania and the mainland. This subsidy is to be reviewed in two years. Provision has also been made for a loan of $1.4 million to Tasmania for the purchase of a vessel and some associated equipment and works to provide a shipping service to King Island. Repayments of §22 million by the Australian Coastal Shipping Commission, in respect of earlier loans, account for most of the estimated repayments in 1 974-75. {:#subdebate-62-120} #### Pipelines The Australian Government has established the Pipeline Authority to provide and operate pipelines for the carriage of petroleum. The advance of S75.0 million to be made to the Authority in 1974-75 includes an amount of $9.2 million for interest payable in respect of previous advances to the Authority, the balance being for expenditure on continued construction of the Moomba-Sydney pipeline, including lateral pipelines from Young to Wagga and Young to Orange/ Bathurst/Lithgow. General administrative and Other Expenditure An amount of SI 9.4 million is provided in 1974-75 for the running expenses of the Department of Transport (excluding the expenses of the Air Transport Group), of which $12.7 million represents wages and salaries. {:#subdebate-62-121} #### Other Recoveries Light dues, which are charges on commercial shipping for the use of marine navigational aids provided by the Australian Government, are the major source of recoveries under this head. The current levy is 31 cents per net registered ton per quarter. In 1974-75 an amount of $14.0 million is expected in light dues. {: type="A" start="B"} 0. WATER SUPPLY AND ELECTRICITY The following table gives details of Budget outlays on water supply and electricity projects, which are estimated to total $51.2 million in 1974-75, an increase of $5.7 million compared with 1973-74. {:#subdebate-62-122} #### Urban Water Supply The Australian Government is providing financial assistance to the Queensland Government to help finance the cost of the Julius Dam near Mt Isa and the Ross River Dam, Stage 2 near Townsville. $2.0 million is expected to be made available by way of loan for the Julius Dam and $0.6 million by way of grant for the Ross River Dam, Stage 2 in 1974-75. The estimates include an amount of $4.4 million for a new scheme approved by the Australian Government to provide finance to South Australia for water treatment works for metroplitan Adelaide. The scheme is designed to upgrade the water quality standards of the Adelaide water supply. The estimates also incorporate an amount of $3.7 million for water supply works in the Australian Capital Territory. 1974-75 will see the commencement of Canberra's next major water storage scheme, the Googong Dam. The total cost of this project is expected to be $26.5 million, but relatively little of this expenditure will be incurred in 1974-75. A further $1.8 million is included in the Budget estimates for water supply works in the Northern Territory in 1974-75. {:#subdebate-62-123} #### Snowy Mountains Scheme The diminishing level of outlays on the Snowy Mountains Scheme over recent years reflects progress towards completion of the Scheme by 30 June 1977. The proposed payment of $5.9 million to the Snowy Mountains Hydro-Electric Authority in 1974-75 comprises $5.1 million in respect of its capital works program (to provide facilities for permanent operation and maintenance and the clean-up of work sites) and an amount of $890,000 for a further payment by the Authority to the River Murray Commission, reimbursing half of the cost of increasing the capacity of the Hume Weir to cater for the diversion of Snowy River waters to the River Murray. An initial payment of $3.7 million was made to the Commision in 1973-74. {:#subdebate-62-124} #### Gladstone Power Station The Australian Government is providing financial assistance to the Queensland Government, by way of loans, to help finance the construction of a thermal power station at Gladstone in central Queensland. Assistance provided by the Australian Government for the project is proportionate to the total cost of the power station in the ratio of 80 to 155. Payments of $14.0 million and $26.6 million were made in 1972-73 and 1973-74 and it is estimated that a further $32.0 million will be made available in 1974-75. {:#subdebate-62-125} #### Repayments Repayments under this heading in 1974-75 are estimated to be $7.9 million, consisting of repayments of $4.9 million by the Snowy Mountains Hydro-Electric Authority and $3.0 million by the Tasmanian Government in respect of hydro-electric power development assistance. {: type="A" start="C"} 0. INDUSTRY ASSISTANCE AND DEVELOPMENT The Australian Government assists industry through a variety of measures, including direct financial assistance, taxation concessions, guaranteed home price arrangements, financial guarantees and the customs tariff. Direct assistance provided to industry from the Budget is estimated at $573.4 million in 1974-75, an increase of $89.5 million compared with actual outlays for 1973-74. However, this increase would be more than offset by the estimated increase in industry levies and charges such as the wool tax, wheat export charge, and meat export charge; details are shown in Statement No. 4. Direct industry assistance takes the form of bounties and subsidies, reconstruction schemes, contributions to research and promotion programs, and other payments to or for the benefit of industry. It includes also some outlays by Government departments and instrumentalities (e.g. Department of Overseas Trade, Department of Manufacturing Industry, Department of Agriculture and the Australian Tourist Commission) ; such organisations provide many services either free of charge or at prices which do not fully recover the costs incurred. Apart from these direct outlays from the Budget, substantial additional assistance has, as noted above, been provided through the Budget by way of special taxation concessions which, as they result in a reduction of Government revenues, are as much a call on the Budget as direct outlays. The amount of revenue forgone in 1973-74 through the main taxation concessions for which data are available is estimated to have been S3 14 million. Further information relating to these taxation concessions is provided at the end of the commentary on this sub-function. Outlays under some other functional headings in this Statement also assist industry. Examples include the provision of airports and airway facilities for the aviation industry, some specific purpose payments to the States, expenditure to improve the defence capacity of industry, and part of the payment to CSIRO. Outlays for direct industry assistance in recent years, together with estimates for 1974-75, are shown in the following table and discussed in the related brief commentary. {:#subdebate-62-126} #### Forestry and Fishing Industries Under the *Softwood Forestry Agreements Act* 1972 the Australian Government is providing financial assistance for a further five-year planting program ending on 30 June 1976. As in the previous Agreement, the assistance to be provided is by way of interest-bearing loans repayable over twenty-five years, with repayments and the payment of interest to commence approximately ten years after the date of each advance. Payments amounting to $14.2 million have been made to the States under this Agreement up to 30 June 1974. Payments of $4.9 million were made in 1973-74 and it is estimated that further payments of $7.4 million will be made in 1974-75. {:#subdebate-62-127} #### Agricultural and Pastoral Industries {:#subdebate-62-128} #### Wool Industry The Government has approved the operation by the Australian Wool Corporation of a minimum reserve price equivalent to 250 cents per kilo clean for 21 micron wool during the 1974-75 season. The Government has indicated that it is prepared to guarantee repayment of amounts borrowed by the Corporation to finance these operations together with 'pot-holing' activities the Corporation will continue to carry on when the market is above the floor. In pursuance of these arrangements the Government has provided for an advance of $13 million to the Corporation from the Corporation's Working Capital Trust Fund and the introduction of a special levy, via an increase in the rate of wool tax, to meet any losses from the operation of the floor price scheme. It is estimated that an amount of $44.7 million will be collected and paid to the Corporation's Market Support Fund. If no losses are incurred this contribution will be used for building up reserves. Of the estimated expenditure of $44 million in 1974-75 for wool research and promotion, $27 million is expected to be contributed by the industry out of the proceeds of the wool tax. (See Statement No. 4 for further details.) {:#subdebate-62-129} #### Wheat Industry The fifth Wheat Industry Stabilisation Scheme will expire with the marketing of the 1973-74 crop. The Australian and State Governments and the wheat industry have agreed on the terms of a new stabilisation plan, which covers the seasons 1974-75 to 1978-79, and the *Wheat Industry Stabilisation Bill* 1974 was introduced recently. No stabilisation payments by the Australian Government are due in 1974-75. In accordance with the stabilisation plan growers are expected, because of buoyant export prices, to contribute an estimated $39 million to the stabilisation fund in 1974-75. (See Statement No. 4.) Over the period 1969-70 to 1971-72, advances were made from the Budget to the Australian Wheat Board to enable the Board to meet its commitments. A final repayment of $65.5 million in respect of those advances was made in 1972-73, and at present no Australian Government advances are outstanding to the Board. {:#subdebate-62-130} #### Dairy Industry Payments of butter and cheese bounties and the processed milk products bounty will decline further in 1974-75 as the second step in the two-year phase-out of these bounties is taken. An amount of $11.5 million is included for payments to the States under the Marginal Dairy Farms Reconstruction Scheme. The Scheme has been extended for two years until 30 June 1976 and broadened in scope pending a report by the Industries Assistance Commission on assistance to the dairy industry. Of the $2.8 million estimated to be spent on research and promotion in 1974-75, an amount of $2.3 million is to be provided by the industry through the dairy industry levies included in Receipts. {:#subdebate-62-131} #### Fruit Industry The Australian Government guarantees minimum returns under stabilisation schemes for apples and pears and for dried vine fruits. In addition, for the 1974 export season only, the Australian Government has joined with the Governments of Tasmania, Western Australia and Queensland in underwriting the returns on certain apple exports. The Australian Government will meet half the costs of underwriting the returns on apples exported 'at risk' during 1974 to the United Kingdom and Europe. An amount of $2.6 million has been included in the Budget estimates for this purpose. Under the Fruitgrowing Reconstruction Scheme introduced in 1972 the States were offered $4.6 million in financial assistance toward a scheme for the removal of trees producing fruit deemed to be surplus to long-term market requirements. Assistance is available only to those orchardists who are experiencing or are threatened by financial difficulties. Expenditure in 1973-74 was $1.7 million and the estimate for 1974-75 is $1.5 million. Amending legislation will be introduced extending the closing date for applications for assistance to 31 December 1975. The expected decline in 'Research, Promotion and Other Expenditure' reflects a reduction in emergency assistance to fruitgrowers adversely affected by the revaluations of the Australian dollar in December 1972 and September 1973. {:#subdebate-62-132} #### Poultry Industry Expenditure on stabilisation and research in the poultry industry is mostly financed from industry levies which flow back to the industry through State egg marketing authorities in accordance with the egg industry stabilisation scheme. {:#subdebate-62-133} #### Cattle, Sheep and Pig Meat Industry In response to stricter requirements by overseas countries on the entry of meat, the Australian Government has, since January 1970, assisted the States in financing an intensive campaign for the eradication of bovine brucellosis and tuberculosis. By June 1974 nearly $13 million had been paid to the States, including $4.9 million in 1973-74. A further $6.5 million is provided in the estimates for 1974-75. In the 1973-74 Budget the Government introduced a charge on the export of meats to recoup from the meat industry the expenditure incurred on this campaign. Revenue from the charge was $2 million in 1973-74 and it is estimated that it will raise $9.8 million in 1974-75. Expenditure on research and promotion is largely financed by industry levies which are shown in Statement No. 4. {:#subdebate-62-134} #### Outlays Not Allocated to Specific Agricultural and Pastoral Industries Rural Lending An amount of $10 million was advanced in 1971-72 to enable the Commonwealth Development Bank to lend for farm build-up purposes; in 1973-74 the Government decided to provide a further $20 million to widen the purposes for which the Bank can lend to the rural sector. No additional advances are included in the 1974-75 estimates. {:#subdebate-62-135} #### Rural Reconstruction Scheme Under the *States Grants (Rural Reconstruction) Act,* assistance is made available to the States for a scheme which embraces debt reconstruction, farm build-up and rehabilitation. By 30 June 1974, $130.6 million had been paid to the States and a further $30 million has been provided for 1974-75. {:#subdebate-62-136} #### Fertilizer Bounties The *Phosphate Fertilizer Bounty Act* provides for the payment of bounty in respect of superphosphate and ammonium phosphate produced and sold for use in Australia. The bounty was introduced to encourage greater use of phosphates as a means of promoting more economic production. The Government has decided that, since the bounty has fulfilled its purpose, it will not be renewed after the present Act expires on 31 December 1974. The estimates allow $33 million for payments in the first half of 1974-75. Payments amounted to $67 million in 1973-74. The Government has also announced that any rural industry or region seriously disadvantaged by the decision to allow the bounty to expire may present a case seeking reference to the Industries Assistance Commission for investigation and report. The Nitrogenous Fertilizers Subsidy was introduced in 1966 and is payable on nitrogen contained in natural sodium nitrate and in manufactured nitrogenous substances produced in Australia and sold for use in Australia as a fertilizer. The Act under which the subsidy is paid was due to expire on 31 December 1974, but was extended pending a report on the subsidy by the Industries Assistance Commission. It is expected that $13 million will be paid in 1974-75, about the same as in 1973-74. {:#subdebate-62-137} #### Inspection Services Outlays for inspection services under the *Commerce (Trade Descriptions) Act* are expected to increase by $3.1 million to $19.5 million in 1974-75. For the recoupment of the cost of export meat inspection services, revenue is raised from a charge on meat exports. (See Statement No. 4.) {:#subdebate-62-138} #### Agricultural Extension and Research Since 1948-49 annual grants have been made to the States to promote improved farm practices in the dairy industry and since 1952-53 further grants have been provided for expansion in the States of agricultural advisory services generally. In addition to the funds provided to the States, a small amount is expended directly by the Australian Government on projects nominated by the States which are of national interest. Up to 30 June 1974 about $53 million had been provided for these purposes; a further $8 million is included in the estimates for 1974-75. {:#subdebate-62-139} #### Irrigation and Other Pastoral Water Projects Expenditure under this heading comprises Australian Government financial assistance to the States for rural water conservation and irrigation purposes and flood mitigation. The main expenditures provided for in 1974-75 are for the Kinchant Dam in Queensland ($2.5 million), the Bundaberg Irrigation Scheme in Queensland ($2.0 million), the Dartmouth Dam on the Murray River ($6.0 million) and the Ord River Dam in Western Australia ($1.1 million). The Government has also decided to provide a grant of $3 million towards the cost of a weir at Clare on the Burdekin River, of which $0.3 million will be provided in 1974-75. The estimates also include provision of $2.5 million for flood mitigation works on coastal rivers in New South Wales, and $120,000 for restoration of damaged levies along the Proserpine River. Payments to the States estimated at $5.4 million in 1974-75 are provided for as part of the three-year program of surface water measurement and underground water resources investigations commenced in 1973-74, and the two-year program of water quality assessment to commence in 1974-75 announced in the Budget Speech. Additional information on these projects is contained in the White Paper entitled *Payments To or For The States and Local Government Authorities 1974-75.* {:#subdebate-62-140} #### Land Development Projects {:#subdebate-62-141} #### Soil Conservation An interim program of financial assistance for State soil conservation programs and concurrent studies will be undertaken by the Australian Government in the general context of an orderly approach to land management. The program will extend over a twoyear period with grants totalling $2.5 million being provided to the States. $0.5 million will be made available in 1974-75. {:#subdebate-62-142} #### Brigalow Lands Development Scheme The *Brigalow Lands Agreement Act* 1962-67 approves an agreement with Queensland for the provision of financial assistance to that State for land development in the Fitzroy River Basin. The Act provides for assistance, subject to an overall limit of $23 million, to finance expenditure by the State on specified works during the thirteen years ending 30 June 1975. The assistance is in the form of interest-bearing loans repayable over twenty years. Payments amounting to $14 million have been made to Queensland under this Agreement up to 30 June 1974. No payments were made in 1973- 74, but it is estimated that payments of $4.2 million will be made during 1974-75. {:#subdebate-62-143} #### Plague Locust Control The Government has decided to contribute $250,000 in 1974-75 towards the establishment of an Australian Plague Locust Commission. Subject to the agreement of the States of New South Wales, Victoria, Queensland and South Australia it is proposed that the Commission be financed by equal contributions by the Australian Government on the one hand and the four States on the other. Provision for the Australian Government's contribution has been included as part of the item 'General Administrative and Other Expenditure'. {:#subdebate-62-144} #### Mining Industry {:#subdebate-62-145} #### Petroleum and Minerals Authority Under the Petroleum and Minerals Authority Act, the Australian Government has established an Authority which is to explore for and develop Australia's petroleum and mineral resources, and assist in implementing the Government's policy of promoting Australian ownership and control of its natural resources and resource industries. $50 million has been provided for the Authority's proposed activities in 1974- 75. {:#subdebate-62-146} #### Petroleum Search Subsidy The Petroleum Search Subsidy Scheme expired on 30 June 1974; $6 million is provided in the Budget for approved exploration programs completed before that date. {:#subdebate-62-147} #### Manufacturing Industry Direct assistance to manufacturing industry is estimated to increase by $39.7 million to $154.6 million in 1974-75. {:#subdebate-62-148} #### Shipbuilding Assistance The essential features of the Government's shipbuilding policy announced on 18 December 1973 are a relaxation of import controls and a phased reduction in subsidy rates down to an eventual long-term rate of 25 per cent. The subsidy is paid to shipowners in respect of the construction of vessels in Australia, following a case-by-case examination by the Australian Shipbuilding Board. Assistance to the shipbuilding industry in 1974-75 is estimated at S24 million. This is to be used to subsidise the construction of about 70 vessels, 40 of which have already been ordered or are being constructed, while the remainder are expected to be ordered in 1974-75. A further $0.9 million is included for the administrative expenses of the Board. {:#subdebate-62-149} #### Industrial Research and Development Grants The Industrial Research and Development Grants Scheme is being reviewed. Expenditure on the present scheme is estimated at $15 million in 1974-75. A further $0.4 million is included for the administrative expenses of the Industrial Research and Development Grants Board. {:#subdebate-62-150} #### Refrigerator Compressor Bounty The Government accepted the recommendation of the Industries Assistance Commission that a bounty of $5 per unit produced be paid to manufacturers of compressors of 1.5 kw or less. This new bounty is expected to cost S2.5 million in 1974-75. *Export Incentive Grants and Pay-roll Tax Rebates* Residual payments under the former export incentive grants and market development rebate scheme, which expired on 30 June 1974, are estimated at $87.5 million in 1974-75 compared with $68.1 million in 1973-74. Legislation authorising the scheme's successor, the proposed Market Development Grants Scheme, will be introduced in the Budget Session of Parliament. No outlays in 1974-75 are expected under the new scheme, which will be designed to encourage firms to seek and develop overseas markets and to participate in Australian Government sponsored trade promotions. {:#subdebate-62-151} #### Structural Adjustment Assistance The Government has decided to introduce a comprehensive scheme of structural adjustment assistance. An amount of $10 million has been provided in the 1974-75 Budget for structural adjustment assistance to help eligible firms and industries adjust to the effects of new Government initiatives, such as tariff and similar changes, which are desirable in the national interest. The Government intends to establish a Structural Adjustment Board to administer this program. Assistance will be available in the form of consultancy grants and closure compensation. Assistance in the form of loan guarantees is proposed but will require legislation. As a general principle applications for assistance should be made within twelve months of the announcement of the relevant Government decision. {:#subdebate-62-152} #### Tourist Industry Total outlays to assist the tourist industry are estimated at $7.4 million in 1974-75, $3.2 million more than in 1973-74. The function of the Australian Tourist Commission is to encourage overseas visitors to travel to and within Australia. The Commission operates posts in Japan, the United States of America, West Germany, the United Kingdom and New Zealand. Expenditure by the Commission in 1974-75 is estimated at $3.3 million. Of the $4.1 million estimated to be spent on other assistance to the tourist industry, $2.25 million has been provided for the development of tourist attractions. As announced in the Budget Speech the Government will widen the criteria upon which such assistance is granted. {:#subdebate-62-153} #### Other Assistance to Industry The Government has decided to discontinue the Petroleum Products Prices Stabilisation Scheme as from 1 August 1974. Expenditure under this Scheme, which operated to keep the wholesale price of certain petroleum products in non-metropolitan areas within 5 cents of the capital city prices, amounted to $21.8 million in 1973-74. Expenditure on export promotion, expected to be Si 3.9 million in 1974-75, includes expenditures on the Trade Commissioner Service ($8.7 million), matching grants to primary product marketing boards ($1.2 million) and trade publicity, fairs and displays ($3.2 million). A further $780,000 has been allocated for the Australian Trade Display in Peking in October 1974; $300,000 was spent on preparations for this display in 1973-74. As announced previously, the Government proposes to establish an export banking institution to provide finance to facilitate the export of machinery and capital equipment on medium/long-term credit. The *Export Payments Insurance Corporation Act* 1956-1973 will be amended during 1974-75 to enable the Corporation to operate as the export bank and $5 million will be advanced to the Corporation to finance its initial lending activities during the year. Industry Assistance Through the Taxation System As mentioned earlier in this Statement, a considerable amount of assistance to industry has been provided in the past through special taxation concessions. Some of these concessions were withdrawn during 1972-73 and others were withdrawn or modified in 1973-74. As indicated in the Budget Speech, legislation is to be introduced withdrawing or reducing certain others. Such concessions result in a reduction of Australian Government revenues (and a corresponding increase in the funds available to the recipients). They are, in fact, as much a call on the Budget as equivalent direct outlays would be, and for this reason have sometimes been described as disguised expenditures. Assistance of this type through the taxation system has been provided mainly by way of income tax concessions which permit firms and individuals to make deductions from their assessable income additional to those authorised under the general provisions of the income tax law. The amount of revenue forgone in 1973-74 through the main taxation concessions is estimated to have been about $314 million. Details are shown below. (Pay-roll tax rebates under the export incentive scheme in respect of exports in 1970-71 and prior years are included under the heading Manufacturing Industry.) Most of the relevant concessions in the income tax field may be grouped in three broad categories, namely: A those allowing the deduction of larger amounts than are authorised under the general provisions of the law (included in this category is the rebate for export market development expenditure, which gives a tax saving additional to the saving resulting from the deductions from income for this expenditure); B those allowing certain taxpayers to deduct the cost of items of plant over shorter periods than is the case for the general run of taxpayers; and C those exempting certain classes of income. The main provisions in each of these classes and the estimated amounts of revenue forgone in 1973-74 are shown in the following table. A miscellany of lesser provisions is not included, in some cases because of lack of data on revenue forgone or questions about the extent to which they may properly be regarded as wholly 'Industry Assistance'. These provisions include the concession whereby primary producers are allowed to adopt artificially low values for natural increase in their livestock accounts for taxation purposes; drought bonds; and the accelerated depreciation of expenditure on employees' amenities. The averaging provisions applied to primary producers are also not included. Taxpayers to whom these provisions apply are assessed on their taxable income for the current year at rates of tax corresponding to the average of their incomes for the current year and the preceeding four years. One effect of the provisions, which is an intended effect, is to ensure that *fluctuations* in income in conjunction with progression in rates of tax do not lead to those taxpayers bearing higher tax rates than other taxpayers having incomes which, over a period of years, are comparable but nonfluctuating. The effects go beyond that when there is an upward trend in incomes over a number of years and, even if there are fluctuations in income superimposed on that trend, the averaging provisions can result in the taxpayers covered by them bearing lower tax rates than other taxpayers whose incomes over a period of years are comparable. {: type="a" start="c"} 0. This estimate is based on the deductions allowable in the 1972-73 income year in respect of purchases and appropriations in that year (net of amounts included in the 1972-73 assessable income in respect of appropriations made in the previous year) *less* the depreciation that would have been allowable in that year on the relevant plant purchases or the plant in respect of which the appropriations were made. While the provisions in question do not allow any greater total deduction over the life of the plant and equipment than do the normal depreciation provisions of the income tax law, they result in a deferment of tax which involves a cost to the Budget and a benefit, namely the provision of interest-free finance, to the taxpayers concerned. Normal depreciation allowances are designed to allow taxpayers to write off the cost of plant and equipment against income as the plant and equipment is used up in producing that income. The value of accelerated depreciation allowances to taxpayers depends on how much sooner they receive savings than would be the case if the allowances had been based on the usage of plant and equipment, and on the value to them of having the use of these savings. Where there is a constant or increasing rate of investment in plant and equipment subject to accelerated depreciation, the concession virtually provides the taxpayers concerned with a revolving or increasing credit in their account with the taxation revenue. 1. This estimate is based on the exemption of income under section 23 (o) - gold mining, section 23 (p) - sale of rights to mine gold and other prescribed minerals, section 23a - one-fifth exemption of income from the mining of prescribed metals and minerals, and section 23c - exemption of income from certain sales of gold produced in Australia, and the exemption in shareholders' hands of dividends paid out of this income. It also includes the cost of the exemption provided by section 44 (2) *(d)* for dividends paid out of income derived from the sale of Australian petroleum. Dividends declared after 21 August 1973 out of exempt profits of gold mining, mining of prescribed metals or minerals, the sale of mining rights and profits from the sale of locally produced petroleum are liable to tax in the shareholders' hands. The exemption conferred by section 23 (p) referred to above ceased to apply in relation to income derived after 21 August 1973 unless derived in pursuance of a contract entered into on or before that date. {: type="A" start="D"} 0. LABOUR AND EMPLOYMENT Expenditure on the Government's labour and employment programs is expected to total $150 million in 1974-75, an increase of $34.8 million on the previous year. Introduction of the National Employment and Training System from 1 October 1974 and increased apprenticeship training assistance account for $20.9 million of the increase. The remainder is largely due to the full-year effects of salary and allowance determinations and growth in departmental activity ($10 million) and to support for trade union training ($2.9 million). The Government's decision to reduce assisted migration to 40,000 settlers within an overall immigration program of 80,000 has reduced the net cost of assisted migration in 1974-75. {:#subdebate-62-154} #### Conciliation and Arbitration Expenditure in 1974-75 is estimated to increase by $0.5 million to $3.8 million as a result of increasing costs and growth in activity. {:#subdebate-62-155} #### Payment to Stevedoring Industry Authority This payment represents collections by the Government on behalf of the Authority in respect of man-hour levies imposed on stevedoring employers under the *Stevedoring Industry Charge Act* 1947-1973. The funds are utilised by the Authority to pay attendance money and leave benefits to waterside workers, and to reimburse employers for pension and redundancy payments. Expenditure in 1974-75 is estimated at $21.3 million, an increase of $1.4 million over expenditure in 1973-74. {:#subdebate-62-156} #### Coal Mining Industry Long Service Leave Long service leave benefits for coal miners are financed from a Trust Fund established under the *States Grants (Coal Mining Industry Long Service Leave) Act* 1949-1968. In States where miners have been awarded long service leave the States reimburse employers the cost of granting this leave. The Australian Government in turn reimburses the States from an excise imposed on the production of coal. The excise is estimated to yield $2.7 million in 1974-75 and this amount has been provided for payments to the Trust Fund. Expenditure from the Trust Fund in 1974-75 is estimated to be $3.2 million. {:#subdebate-62-157} #### Trade Union Training A program of trade union training under the direction of National and State Councils, including the establishment of a national trade union college and State trade union training centres, will be financially supported by the Australian Government. Legislation is expected to be introduced in the Budget Session of Parliament. A provision of $3.0 million has been made for 1974-75. {:#subdebate-62-158} #### Apprenticeship Training The purpose of the National Apprenticeship Assistance Scheme, introduced in January 1973, is to increase the available number of apprenticeships and to improve the standard of training. Under the scheme, incentives are provided to employers by way of subsidies for apprenticeship wages and to enable off-the-job training to be undertaken. Allowances are available to first-year and some second-year apprentices living away from home. Expenditure on apprenticeship training has increased sharply since 1972-73 and is reflected in the fact that the number of apprentices rose by 21 per cent in 1973-74. The Government has decided to raise the wages subsidy paid to employers of apprentices from $260 a year for each apprentice employed by metropolitan employers and $454 a year for country employers, to $460 a year for both categories of employers. The subsidy for off-the-job training for each apprentice will be raised from $16 to $20 a week. Weekly living-away-from-home allowances for first-year apprentices will be increased from $10 to $12.60 and the rate of $5 at present applying to second-year apprentices under five-year apprenticeships will be paid to all secondyear apprentices living away from home. In addition, the Government has decided to pay the wage costs of up to 500 apprentices taken on by State Governments, but surplus to their actual requirements in 1974-75. A scheme whereby apprentices will be trained up to the completion of their first or second year within the industrial establishments of the Australian Government Department of Manufacturing Industry and will then complete their apprenticeships with private industry will also be introduced during 1974-75. Expenditure in 1974-75 is estimated at $15.3 million, an increase of $8.8 million on the previous year. The Government's decisions referred to above account for $2.9 million of the increase. {:#subdebate-62-159} #### Employment Training Schemes An initial allocation of $17.8 million has been provided in the 1974-75 Budget for the National Employment and Training System (NEAT) to be introduced from 1 October 1974. NEAT will provide a broader and more flexible system of training and retraining to meet and integrate the needs of individuals and the conditions of the labour market. NEAT will subsume employment training schemes presently administered by the Department of Labor and Immigration and the Department of Social Security's widow pensioner training scheme. Under NEAT the special rights and benefits applicable to Aborigines and Repatriation pensioners will be preserved. Full-time and part-time training allowances under NEAT will have a fixed relationship with the average adult male award wage. Additional assistance includes livingawayfromhome allowances, payment of fees, books and equipment to the value of §150 and fares. The costs of employers providing in-industry training and/ or meeting the wage costs of trainees, or who release employees accepted for retraining during working hours, will be subsidised. Expenditure on all employment training schemes and for the improvement of training in industry and commerce in 1974-75 is estimated to total $20.5 million, an increase of $12.1 million on 1973-74. Provision is included in this figure for the administration of Aboriginal employment training and the vocational training scheme for Aborigines in the Northern Territory ($1.3 million). {:#subdebate-62-160} #### Assisted Migration In determining their targets for the annual migration program, successive Governments have been influenced by their assessment of the need for workers in Australia, the availability of suitable migrants, and Australia's capacity to absorb those migrants. Recognising the need to retain migrants and the social implications of the immigration program, the Government now places greater emphasis on family reunion in the composition of the annual migrant intake. The proposed program for 1974-75 is 80,000 settlers, 30,000 less than in 1973-74. Assisted migrants are expected to number 40,000, 10,000 less than last year. Expenditure under the program is estimated at $19.5 million in 1974-75, $1.7 million less than in 1973-74. The lower cost reflects the reduction in the assisted migration program partially offset by higher operating costs and an increased construction program to improve accommodation standards at migrant hostels. The main components of the assisted migration program in 1974-75 are embarkation and passage costs ($14.8 million) and transitory accommodation ($5.9 million). Contributions by assisted migrants towards passage costs are expected to reach $1.4 million in 1974-75. {:#subdebate-62-161} #### General Administration Expenditure in 1974-75 for the operating costs of the Department of Labor and Immigration is estimated at $63.8 million, an increase of $10.0 milion over 1973-74 expenditure. The increase is almost entirely due to the full-year effect of growth in staff numbers particularly in the employment and training areas and to the full-year effect of salary determinations. {: type="A" start="E"} 0. OTHER ECONOMIC SERVICES This residual group covers several economic services which are not readily categorised elsewhere. Outlays on these various services in each of the past two years and the estimates for 1974-75 are summarised in the following table: {:#subdebate-62-162} #### Economic and Trade Regulation Most of the outlays under this heading relate to the costs of operations of the various authorities listed. The Industries Assistance Commission was established by the Government in 1973 to inquire into and report to the Government on questions of assistance for all industries. The Tariff Board had previously advised on protection for manufacturing industry, and its activities have been taken over by the new Commission. Outlays shown in the table for .periods prior to the establishment of the Commission represent expenditure by the Tariff Board. The estimate of $1.9 million for 'Other' in 1974-75 includes provision for the Metric Conversion Board and the National Standards Commission. Recoveries under this heading, which are estimated to increase to $5.4 million in 1974-75, are mainly in the form of fees charged by the Patent, Trade Marks and Designs Offices. {:#subdebate-62-163} #### Specialised Activities and General Administrative Services Increases in wage and salary costs are responsible for most of the increases of both the specialised activities and general administrative services listed in the above table. Recoveries in respect of specialised activities, which are estimated to increase to $10.1 million in 1974-75 are revenues of the Bureau of Meteorology from specialist services. {: type="1" start="9"} 0. GENERAL PUBLIC SERVICES This broad functional heading covers a range of general public services and activities concerned with the organisation and operation of the Australian Government, including administrative services, the maintenance of law and order and foreign affairs and overseas aid. {: type="A" start="A"} 0. LEGISLATIVE SERVICES Estimates of outlays on legislative services in 1974-75, together with details of actual outlays in the preceding two years, are shown in the following table: {:#subdebate-62-164} #### Parliamentary Expenditure - Salaries and Allowances Expenditure on Parliamentary salaries and allowances is expected to remain at about the same level as in 1973-74. The Government submitted the question of Parliamentary remuneration to the Remuneration Tribunal which released its Report in July 1974. The Tribunal's determination, recommending an increase in salaries paid to Senators and Members of the House of Representatives, was disallowed by the Parliament. {:#subdebate-62-165} #### Parliamentary Expenditure - Other This item covers salaries, administrative costs and capital works associated with the functioning of Parliament and includes costs relating to State and Electorate offices of Senators and Members of Parliament, ministerial staff and the staff of other officeholders. Of the $3.8 million increase, $2.8 million relates to increased salary costs and $0.4 million to increased costs of printing Hansard. Other general cost increases have been partly offset by a reduction of $0.3 million in the requirement for capital works in respect of Parliament House. Actual outlay for 1973-74 was generally lower than expected due to a fall in activities following the double dissolution of Parliament. {:#subdebate-62-166} #### Australian Electoral Office This item reflects the administrative costs of maintaining electoral rolls and the conduct of Australian Government elections and referenda. The exceptionally high level of expenditure in 1973-74 ($13.0 million) was due to the unscheduled House of Representatives election and various referenda held during the year. Provision has been made in 1974-75 for elections for the Northern Territory Legislative Council and the A.C.T. Legislative Assembly. {: type="A" start="B"} 0. LAW, ORDER AND PUBLIC SAFETY Australian Government outlays on law, order and public safety are estimated to total $77.6 million in 1974-75, an increase of $21.6 million compared with 1973-74. Details of actual outlays in the two years to 1973-74, together with estimates for 1974-75, are provided in the following table and associated commentary: {:#subdebate-62-167} #### Courts and Legal Services *High Court* $0.4 million is estimated for 1974-75 expenditure on the High Court building in the Australian Capital Territory, the completed cost of which is estimated at $9.3 million. The other $0.9 million under this heading represents the estimated running costs of the High Court in 1974-75. {:#subdebate-62-168} #### Commonwealth - State Law Courts The Australian Government is meeting some 45 per cent of the construction costs for a joint Court complex with the State of New South Wales in Sydney. The Australian Government's contribution in 1974-75 is estimated at $2.9 million. *Australian Law Reform Commission* $0.2 million is included for salaries and administrative costs of the Commission, which is expected to commence operations during 1974-75. {:#subdebate-62-169} #### Legal Aid The increase in outlays for legal aid reflects the increasing commitment of the Australian Government in this field. A central office, eight branch offices and fifty-six regional offices of the Australian Legal Aid Office are expected to be established during 1974-75. The total cost for 1974-75 is expected to be $12.4 million and includes payments to private legal practitioners estimated at $3.6 million, grants to the extent of $1.3 million to supplement existing legal aid schemes and $2 million (an increase of $0.8 million over 1973-74) for legal aid to Aboriginals. {:#subdebate-62-170} #### Police Security and Detention The increase of $6.0 million reflects a general upgrading of the equipment and strength of the Commonwealth, Australian Capital Territory and Northern Territory Police Forces. {:#subdebate-62-171} #### Attorney-General's Department Administrative expenditure by the Attorney-General's Department is estimated to be $10.3 million in 1974-75, an increase of $2.3 million on 1973-74. The main increase is for salary payments; other increases include $0.3 million to print a 1901-1973 consolidation of Australian Government Acts. {:#subdebate-62-172} #### Public Safety and Protection The Government is providing $875,000 in 1974-75 for road safety promotion and research and an annual grant to the States of $150,000 for promotion of road safety practices. Other outlays on public safety include funds for various fire-prevention services and grants to the Surf Life Saving Association and the Royal Life Saving Society. *Buildings, Works and Equipment nec* An estimated increase in expenditure of $0.5 million on the Belconnen (A.C.T.) police complex and remand centre accounts for most of the estimated increase in 1974-75 of $0.8 million. {: type="A" start="C"} 0. FOREIGN AFFAIRS AND OVERSEAS AID This heading embraces most of the costs incurred by the Australian Government in the pursuit of polices designed to foster our relations with foreign countries and external territories. The bulk of the expenditures (about 79 per cent in 1974-75) relates to various external economic aid programs undertaken by Australia to assist developing countries, including Papua New Guinea, to achieve faster rates of economic growth and thereby raise their living standards. A detailed explanation of these aid programs is given in *Budget Paper No. 9* entitled 'Australia's External Aid 1974-75'. Total outlays on foreign affairs and overseas aid are estimated to increase by $63.1 million, or 17.4 per cent, in 1974-75 to $425.9 million. As the following table shows, the net increase in aid payments accounts for most of this increase. {:#subdebate-62-173} #### Aid Payments Australia's various aid programs are discussed in detail in *Budget Paper No. 9* referred to above, which also brings together some expenditures of an external aid nature which are subsumed in other functional -headings in this Statement. That Paper also comments briefly on Australia's relative aid performance. The substantial increase in aid expenditures provided for in 1974-75 reflects very large increases for both Mutilateral and Bilateral aid programs and a reduction in aid to Papua New Guinea. The decrease in aid payments to Papua New Guinea in 1974-75 arises because of the substantial special assistance which was given to that country in 1973-74 to facilitate its transition to self-government on 1 December 1973. A considerable part of that assistance ($34.8 million) was provided to facilitate the 'purchase' of assets previously owned in Papua New Guinea by certain Australian Government departments and instrumentalities which the Papua New Guinea Government was obliged to take over to enable it to continue to perform the various associated functions for which it assumed responsibility during 1973-74. After allowing for receipts from the 'sale' of these assets - shown as recoveries in other functional headings in this Statement - and other non-recurring assistance provided to Papua New Guinea in 1973-74 to help establish certain public institutions (e.g. the government commercial bank and national airline) of a self-financing nature, aid payments to Papua New Guinea in 1974-75 will show a significant increase over the comparable figure for 1973-74. The large increase in Bilateral aid payments is mainly accounted for by a proposed contribution of $40 million by Australia towards the United Nations Special Program to assist developing countries which have been seriously affected by the recent oil price increases and other related international developments; there is also an estimated increase of $8.2 million in expenditure on Colombo Plan projects and Special Aid to Indo-China. The expected growth in Multilateral aid payments is largely explained by substantial increases in Australia's contributions to various United Nations and other international aid programs, as well as estimated increases of $4.7 million in payments *to the* International Development Association and $3.0 million to the Asian Development Bank. {:#subdebate-62-174} #### Cocos (Keeling), Christmas and Norfolk Islands Included in this item are the costs involved in administering these three small external territories. A program for the restoration of historic buildings on Norfolk Island, commenced in 1973-74, will continue during 1974-75. An allocation of $159,000 has been made in the Budget for this purpose. {:#subdebate-62-175} #### Membership of International Organisations and Other Non-Aid Expenditure This item encompasses expenditures incurred by virtue of Australia's membership of a wide range of international organisations. Active participation in many global and regional organisations is an integral part of Australia's present foreign policy. This involves financial contributions towards the administrative expenses and, in some cases, the functional activities of the organisations in question. Total expenditure under this heading is expected to increase from $9.7 million in 1973-74 to $9.8 million in 1974-75. Among the increases are a provision of $583,000 for Australia's participation in the International Ocean Exposition at Okinawa in 1975, and planned increases in Australia's contributions in 1974-75 to the OECD (to $790,000) and the World Health Organisation (to $1,023,000). Expenditures associated with Australia's cultural relations with various other countries are also estimated to increase sharply from $555,000 in 1973-74 to $850,000 in 1974-75. Offsetting these increases are expected reductions in expenditures relating to Australia's participation in the International Exposition at Spokane in 1974, the United Nations Environment Fund, and the Inter-Governmental Commission on European Migration. {:#subdebate-62-176} #### General Administrative Expenditures Included in this item are the administrative costs of the Department of Foreign Affairs, the Office of the Australian Development Assistance Agency and the Overseas Property Bureau. The large increase in 1974-75 is explained in part by planned expenditures on a new construction program for chanceries in Bangkok (estimated total cost $3.9 million), Singapore (estimated total cost $3.6 million), Paris (estimated total cost, including associated apartment block, $11.8 million) and Wellington (estimated total cost $3.6 million). Provision has also been made for expenditure on major chancery extensions in Washington (estimated cost $3.5 million). The increase in 1974-75 also reflects the provision of computer services for the Department of Foreign Affairs; the transfer to that Department of certain functions from the former Department of Immigration (mainly the issuing of passports); costs associated with running the Papua New Guinea Office in Sydney (recoverable from the Papua New Guinea Government) ; and the takeover by the Department of all locally engaged staff employed under the Public Service Act (previously included under other functions), as well as the provision of common management services, at all overseas posts in future. {: type="A" start="D"} 0. GENERAL AND SCIENTIFIC RESEARCH NEC The largest expenditure under this heading is that by CSIRO. Also included are expenditures on specific programs of research undertaken by several Government departments and instrumentalities, such as the research activities of the Department of Science in the Antarctic and the nuclear research activities of the Australian Atomic Energy Commission. Assistance for general research activities through the Australian Research Grants Committee, fellowship schemes and support for the learned academies are also shown under this heading. The main items of expenditure are summarised in the following table and related notes: {:#subdebate-62-177} #### Australian Atomic Energy Commission The Commission's major functions include research and investigation into matters associated with uranium and atomic energy and the production and sale of radio isotopes. The estimated increase of $1.5 million in expenditure by the Commission in 1974-75 is due mainly to increases in salaries and wages arising from awards and determinations made in 1973-74. {:#subdebate-62-178} #### Commonwealth Scientific and Industrial Research Organisation Expenditure by CSIRO relates to the Organisation's activities in the fields of agricultural, biological, industrial and physical research, together with the provision of research services and facilities and support for research associations. The increase of $12.0 million in the provision for CSIRO in 1974-75 includes additional salary and wage costs of $7.8 million. Provision of $80,000 is made for the design study of an oceanographic research vessel, as announced in the Budget Speech. {:#subdebate-62-179} #### Research Grants Assistance is provided through the Australian Research Grants Committee, the Queen Elizabeth II Fellowship Scheme and the Queen's Fellowships Scheme, for research projects by individuals in the fields of the humanities and social sciences, the physical, chemical, biological and earth sciences, engineering and applied sciences and marine science. {:#subdebate-62-180} #### Australian Institute of Marine Science The Australian Institute of Marine Science was established in 1972 to conduct studies in marine science and to co-ordinate and develop marine science in Australia. Initially, the work of the Institute is being directed to studies of the Great Barrier Reef, the Coral Sea and the coast and adjacent waters of North Queensland. The Institute will occupy temporary premises in Townsville pending the construction of a laboratory at Cape Ferguson. The increase in expenditure in 1974-75 reflects the further development of the Institute following the appointment of the Director in July 1974. As announced in the Budget Speech, provision of $25,000 is made for the design by the Department of Transport, with the assistance of an experienced overseas consultant, of a research vessel for the Institute. {:#subdebate-62-181} #### Anglo-Australian Telescope Board This item covers the Australian Government's share of the cost of construction and operation of a 3.9 metre optical telescope near Coonabarabran in New South Wales. The total capital cost of the project, estimated at $15.7 million, is to be shared equally between Australia and the United Kingdom. The construction of the telescope will be completed this year. The operation of the facility in 1974-75 will require an estimated $725,000, one-half of which will be met by Australia. {:#subdebate-62-182} #### Australian Institute of Aboriginal Studies The Australian Institute of Aboriginal Studies was established in 1964 to promote, encourage and assist studies and research in relation to the Australian Aboriginal people. The grant to the Institute of $1.6 million in 1974-75 will enable the Institute to maintain the increased level of activity resulting from the increase in the grant in 1973- 74. In particular, work will continue on the identification, recording and preservation of sites that are of special significance to Aboriginals, on the collection of Aboriginal music, folklore and language and on research into the interaction between Aboriginals and Europeans. *Other Research and Science nec* Items under this heading include support for the Academies of Science, the Social Sciences and the Humanities, the Australian and New Zealand Association for the Advancement of Science and other minor expenditures in support of scientific and research activities. Provision has been made for a number of new items in 1974-75. An amount of $220,000 has been included for the operation of a scientific balloon launching facility at Mildura previously operated on behalf of the United States Atomic Energy Commission. The Government has approved in principle a grant to the University of Sydney to construct a large stellar interferometer (an astronomical research instrument). Included in the Budget is an initial grant of $75,000 to be paid to the University in 1974-75 for a detailed design study of the instrument. Assistance to Australian inventors has been provided in the past through a Government grant to the Inventors Association of Australia. In 1973-74 the grant amounted to $10,098. In 1974-75 the grant to the Association will be increased to $20,000 and the Government will also provide further funds of $200,000 to assist inventors in further development of their inventions. {: type="A" start="E"} 0. ADMINISTRATIVE SERVICES Included under this heading are general administrative services not allocated to specific functions, together with some common services. Details of outlays on general administrative services in 1972-73 and 1973-74, together with estimates for 1974-75, are shown in the following table: The Government has decided on a policy of restraint in its employment of staff in 1974-75, and is applying a ceiling increase of 2.6 per cent on the growth of full-time staff under the Public Service Act. After allowance for a large increase in the number of staff on various forms of leave, the ceiling increase on total operative staff employed under the Public Service Act will be 1 per cent. Similar staff restraints will apply to Government employment other than under the Public Service Act. The Government has established a Royal Commission on Australian Government Administration and it is expected that it will report within two years. The cost in 1974-75 is estimated at $562,500. Outlays on general administrative services other than common services and net superannuation payments are estimated to total $319.4 million in 1974-75, an increase of $51.1 million compared with 1973-74. The main factors are increases in staff numbers combined with the full-year effects of salary and other wage increases granted during 1973-74. {:#subdebate-62-183} #### Statistical Services In December 1973, the Government established the Committee on Integration of Data Systems (Crisp Committee) to advise on the general principles and administrative arrangements which would enable the Government to integrate data systems servicing its social and economic policies. The Government has accepted the recommendations of the Committee to establish the Australian Bureau of Statistics as a statutory authority and also to establish an Australian Statistics Advisory Council which would be representative of users of official statistics to advise on statistical priorities and the efficiency of statistical systems. Legislation to give effect to the recommendations is expected to be presented in the Budget Session of Parliament. Other Administrative Services nec {:#subdebate-62-184} #### The Australian Ombudsman Legislation establishing the Office of the Ombudsman is expected to be presented during the Budget Session of Parliament. Running expenses are estimated to amount to $220,000 in 1974-75. {:#subdebate-62-185} #### Common Services Included under this heading are outlays of departments and agencies providing general services for the Government as a whole, such as construction activities, printing, publicity, and the purchase and leasing of buildings. *Construction Services (net)* The estimated increase of $14.0 million in outlays on Construction Services is due mainly to expected increases of $10.7 million in salaries and other administrative expenses of the Department of Housing and Construction ('non-housing' function). The construction of a large workshop plant complex for the Department in Western Australia is also reflected in the increase. {:#subdebate-62-186} #### Australian Government Offices The estimated increase of $9.4 million mainly reflects an extensive acquisitions program. {:#subdebate-62-187} #### Government Printer The estimated increase of $1.3 million is mainly due to increased provision for purchase of plant and equipment ($1.2 million) and provision of $1 million for working capital, offset by reductions in other items. {:#subdebate-62-188} #### Property Management and Services The estimated increase of $10.2 million is due to increased costs of salaries and other administrative expenses ($5.7 million) and contract cleaning services provided in the main, for government office accommodation and schools ($2.4 million). {:#subdebate-62-189} #### Publicity Services Expenditure under this heading includes the programs of publicity undertaken by the Department of the Media through the Australian Information Service and Film Australia, and an estimated expenditure of $800,000 on publicity relating to the machinery of Government. {: type="1" start="1"} 0. NOT ALLOCATED TO FUNCTION Outlays not allocated to specific functions comprise payments to the States and local government authorities not elsewhere classified in this Statement, natural disaster relief, interest payments on the public debt, the new Regional Employment Development Scheme and an allowance of $150 million for increases in wages and salaries for Australian Government employees (other than in the Post Office) and the defence forces. {: type="A" start="A"} 0. PAYMENTS TO OR FOR THE STATES AND LOCAL GOVERNMENT AUTHORITIES NEC AND NATURAL DISASTER RELIEF This item comprises general revenue assistance for the States, State Government Loan Council programs, assistance related to State debt, certain forms of financial assistance for local government and natural disaster relief. Details of these payments are presented below; additional information on these and other payments to the States classified under various functional headings is contained in the Budget Paper *Payments To or For The States and Local Government Authorities, 1974-75.* {:#subdebate-62-190} #### General Revenue Assistance General revenue assistance is utilised for purposes determined by the States themselves. The financial assistance grants, which make up most of this assistance, are determined each year under a formula which takes account of increases in average wages in Australia as a whole and the increase in population in each State. It should be noted that year-to-year comparisons of general revenue assistance are affected by some significant changes in the arrangements under which those grants are paid. Thus, beginning in 1971-72 the grants have been reduced to take into account the transfer of pay-roll tax to the States in September 1971, while the grants for 1973-74 and the estimates for 1974-75 reflect the reductions (amounting to $111.8 million and $229.7 million respectively) which the Australian and State Governments agreed should be made in view of the assumption of full financial responsibility for tertiary education by the Australian Government from January 1974. Special grants are paid on the recommendation of the Grants Commission to socalled 'claimant' States (presently Queensland and South Australia). The Commission's recommendations for grants in 1974-75, which total $48.2 million, have been accepted by the Australian Government. Tasmania withdrew from the Grants Commission system as from the beginning of 1974-75, following an agreement between the Australian and Tasmanian Governments under which the State will receive an amount of $15 million as an addition to the financial assistance grant otherwise payable to the State in 1974-75. Special revenue assistance, additional to the financial assistance grants and the special grants, has been paid to the States in most recent years. However, no such assistance has been agreed to for 1974-75. Special repayable and interest-bearing advances were made in 1971-72 and 1972-73 to New South Wales, having regard to the difficult budgetary situation faced by that State in those years. No such special advances are provided for in the 1974-75 Budget. - In aggregate, and after allowing for the reductions in respect of tertiary education, general revenue assistance (net) is estimated to increase by 22.7 per cent in 1974-75 to $2,359.4 million. {:#subdebate-62-191} #### State Government Loan Council Programs At its meeting in June 1974 the Loan Council approved a total program for the State Governments in 1974-75 of $934.9 million, consisting of capital grants of $296.9 million to be provided by the Australian Government and borrowings of $638.0 million, which the Australian Government has undertaken to support. Subsequently, the Australian Government decided to increase the total program by $92.5 million of which $29.7 million is to be provided as capital grants and the remaining $62.8 million as an addition to States' borrowings. The Loan Council programs for 1973-74 and 1974-75 have been reduced by estimated amounts of capital expenditure of which the States have been relieved on account of the assumption by the Australian Government of full responsibility for financing tertiary education as from January 1974. With adjustments to make the figures comparable in both years, the 1974-75 program represents an effective increase of 21.5 per cent on the 1973-74 program. The relevant outlays on tertiary education are discussed under the Education function. {:#subdebate-62-192} #### Assistance Related to State Debt Under the Financial Agreement the Australian Government pays $15 million each year to the States as a contribution towards interest payable on their debt and also contributes sinking fund payments. The sinking fund payments in 1974-75 are estimated to total $31.1 million. Debt charges assistance grants are being made in accordance with an undertaking by the Australian Government to meet the debt charges on $200 million of State debt in 1970-71 and a further $200 million each year from 1971-72 to 1974-75. Grants totalling $57.5 million will be made for this purpose in 1974-75, the last year of the arrangements. The Australian Government, as from 1975-76, will have direct responsibility for debt charges on this package of debt. {:#subdebate-62-193} #### Assistance for Local Government As already announced, the Government has accepted the recommendations contained in the Grants Commission's first report on financial assistance for local government. These unconditional grants provide $56.3 million for 806, or 92 per cent of, local governing bodies. Their purpose is to reduce financial inequalities between local government authorities. The funds are not intended to replace existing State Government grants or rates charged by Councils. To assist in the establishment of the regional organisations which make applications for assistance to the Grants Commission, the Budget provides an amount of $314,000 for administrative expenses and to encourage regional planning. {:#subdebate-62-194} #### Natural Disaster Relief Following disastrous flooding in New South Wales, Queensland and the Northern Territory during the first three months of 1974, the Australian Government agreed to provide financial assistance for relief and restoration measures. Amounts of $28.5 million (including $0.6 million to flood relief appeals) and $0.3 million were paid to Queensland and New South Wales respectively and $0.1 million was expended in the Northern Territory. It is estimated that $44.7 million will be paid to the States for flood and other disaster relief purposes during 1974-75; of this amount, $26.1 million is expected to be paid to Queensland. This estimate makes no allowance for disasters which may occur during the year. {: type="A" start="B"} 0. PUBLIC DEBT INTEREST This heading brings together interest payments made from the Budget sector to other sectors, including interest payments on government securities, and under defence credit arrangements with other countries. Interest received by Government Trust Funds on Australian Government securities held as investments and cash balances is offset against gross interest payments. *Gross Interest Paid on Australian Government Securities* The figure for gross interest paid on Australian Government securities comprises interest on all Australian Government securities on issue except for interest on defence borrowings. It includes interest paid on securities recorded at State Registries and also interest on advances for housing, railways and War Service Land Settlement that is reimbursed by the States to the Australian Government. {:#subdebate-62-195} #### Loan Defence Acts Interest Estimated interest payments on loans raised in the United States for defence equipment purchases reflect the declining level of outstanding debt in 1974-75. {:#subdebate-62-196} #### Loan Consolidation and Investment Reserve Interest is received by the Loan Consolidation and Investment Reserve on investments in Australian Government securities which were mainly issued in Special Loans to assist State works programs. {:#subdebate-62-197} #### Other Interest is received by other Australian Government Trust Funds, including the National Welfare Fund and the National Debt Sinking Fund, on investments in Australian Government securities and cash balances. {: type="A" start="C"} 0. ALLOWANCE FOR WAGE AND SALARY INCREASES An allowance of $150 million has been included in the Budget estimates to take account of further increases in wages and salaries in the public sector over the course of the year. This allowance is consistent with expected trends in average weekly earnings in the economy generally. {: type="A" start="D"} 0. REGIONAL EMPLOYMENT DEVELOPMENT SCHEME An amount of $25 million is being provided for the new Regional Employment Development Scheme, recently approved by the Government. {: .page-start } page 1377 {:#debate-63} ### STATEMENT No. 4 - ESTIMATES OF RECEIPTS, 1974-75 On the basis of *existing* rates of taxes and other charges, it is estimated that total receipts in 1974-75 would amount to $15,896 million, an increase of 32.4 per cent on actual receipts in 1973-74. The general revenue measures announced in the Budget Speech are estimated to reduce receipts in 1974-75 by about $237 million. An increase in the levy on wool will bring in an estimated $45 million in 1974-75. Overall, total receipts are estimated to amount to $15,704 million, an increase of 30.8 per cent on actual receipts in 1973-74. The estimated effects of the new measures announced in the Budget Speech on receipts in 1974-75 and in a full year are shown in the following schedule: The following table compares estimated receipts in 1974-75 with actual receipts in the two preceding years. {: .page-start } page 1378 {:#debate-64} ### TAXATION REVENUE The estimate of total taxation revenue in 1974-75 is, at $14,518 million, $3,581 million or 32.7 per cent above the 1973-74 outcome. The main components of this change are described below. {:#subdebate-64-0} #### Customs Duty Customs duty collections in 1974-75 are estimated to total $770 million. Although imports in 1974-75 are forecast to be considerably higher than in 1973-74. the rate of increase underlying this estimate of collections is considerably less than that recorded in 1973-74. Nevertheless, the expected increase in collections in 1974-75 of 27.4 per cent compares with only 17.7 per cent in 1973-74, when collections were affected by the 25 per cent reduction in all 'non-revenue' duty rates announced in July 1973. The 1974-75 estimate is also affected by increases in rates of customs duty on potable spirits and tobacco products announced on 23 July 1974. which are expected to yield $22.2 million this year. {:#subdebate-64-1} #### Excise Duty Excise collections are estimated to increase by 13.5 per cent in 1974-75 compared with 22.6 per cent in 1973-74. The increases in excise duty rates on tobacco products and potable spirits announced on 23 July 1974 contribute $78 million to the estimated total increase of $210 million. However, in overall terms, the rate of increase in clearances of goods subject to excise duty in 1974-75 is forecast to be lower than that recorded in 1973-74. The main components of the 1974-75 estimates are as follows: {:#subdebate-64-2} #### Sales Tax Increases in sales values of goods subject to sales tax in 1974-75 are not expected to reach the very high rates experienced in 1973-74; continuing rapid rises in prices are likely to be partly offset by a slow-down in the rate of increase in sales volumes compared with 1973-74. On the basis of existing legislation, sales tax collections are estimated to increase by 14.1 per cent to $1,105 million in 1974-75, compared with an increase of 26.6 per cent in 1973-74. {:#subdebate-64-3} #### Income Tax - Individuals Before allowance for the changes announced in the Budget, net collections of income tax from individuals in 1974-75 were estimated to increase by 49.2 per cent to $8,190 million. {: type="a" start="a"} 0. *Pay-as-you-earn Instalment Deductions* In the absence of rate changes, gross pay-as-you-earn instalment deductions in 1974-75 would amount to an estimated $7,320 million, an increase of 46.1 per cent over 1973-74. Underlying this estimate are the assumptions that average weekly earnings per employed male unit will increase by 22.5 per cent and average actual employment by 2 per cent during 1974-75. In present circumstances, this average earnings assumption is even more uncertain than usual; while taking account of the movement that has already occurred, it does not imply that a reliable forecast of the trend in earnings for the remainder of the year can be made at this point. To the extent that the assumption should involve an under-estimate, inflation, and the effect of inflation on the Budget, will be that much greater. The measures announced in the Budget Speech are estimated to reduce gross collections from pay-as-you-earn instalment deductions by $201 million in 1974-75. Refunds of pay-as-you-earn tax instalment deductions in 1974-75 are estimated to increase by 20.5 per cent to $930 million. The relationship of refunds to gross pay-as-you-earn instalment deductions in 1974-75 is estimated to be somewhat below its 1973-74 level because it is expected that concessional deductions to be allowed on assessment will have increased at a lower rate than incomes in 1973-74. The estimate for net PAYE collections in 1974-75, after taking account of the measures announced in the Budget Speech, is $6,189 million, an increase of $1,951 million or 46.0 per cent over 1973-74. {: type="a" start="b"} 0. *Other* In this category of taxpayers, it is 1973-74 incomes which are subject to tax in 1974-75. Although incomes of primary producers are estimated to have risen less rapidly in 1973-74 than in 1972-73, it is estimated that the increase in other incomes - which comprise the bulk of the category - was higher in 1973-74 than in the preceding year. The net result is that on the basis of *existing* legislation, collections on assessments of individuals in 1973-74 are estimated to increase by 43.8 per cent to $1,800 million, compared with an increase of 34.8 per cent in the previous year. The measures announced in the Budget Speech are estimated to reduce collections by $23 million this year, bringing estimated total collections from this source to $1,777 million. {:#subdebate-64-4} #### Income Tax - Companies On the basis of existing tax rates, collections of income tax from companies in 1974-75 are estimated at $2,440 million, an increase of 24.9 per cent on 1973-74. Company income in 1973-74, from which the present year's collections are drawn, is estimated to have been 22.0 per cent above its 1972-73 level. After taking into account the second and final step in equating the tax rate on private companies' incomes with the public company rate of 47.5 per cent, as announced in the 1 973-74 Budget Speech, 1974-75 collections of company taxation are estimated at $2,480 million, 26.9 per cent more than in 1973-74. The measures announced in this year's Budget Speech will not affect collections in 1974-75. *Pay-roll Tax* The estimate of pay-roll tax collections in the Australian Capital Territory and Northern Territory in 1974-75, at $11.8 million compared with $7.7 million in 1973-74, takes account of the increase in the rate of pay-roll tax which operated from 1 July 1974, and the further increase, announced in the Budget Speech, to operate from 1 December 1974. {:#subdebate-64-5} #### Estate Duty Collections of estate duty in 1974-75 are estimated at $65 million; this allows for the proposed exemption of the matrimonial home from liability to estate duty, estimated to cost $3 million in 1974-75. {:#subdebate-64-6} #### Withholding Tax Dividend withholding tax is estimated to yield $62 million, and interest withholding tax $24 million, in 1974-75. Receipts classified under this heading include income and capital transfers which are essentially of a governmental nature and involve regulation or compulsory payment or which are primarily to raise revenue. Included are miscellaneous taxes, regulatory fees, fines and unfunded employee contributions to retirement benefit schemes. In total, other taxes, fees and fines are estimated to increase by 26.5 per cent to S259 million in 1974-75, with most of this expected increase occurring in primary industry charges and levies. Receipts under this sub-heading consist of proceeds from compulsory levies or charges on specific primary industries. In most instances these receipts are employed, along with contributions from the Government, for the benefit of the industries involved, mainly by way of research, promotion and marketing activities. The estimated increase of S45.2 million in wool levy collections mainly reflects the increase in the rate of levy introduced in association with the new floor price arrangements for the 1974-75 season. The estimated increase in meat export charges of $22.1 million in 1974-75 reflects the first full-year operation of this charge and an expected increase in the rate of exports after a slow-down in the second half of 1973-74. An additional $29.2 million in wheat export charge collections is expected to result from a large increase in the volume of wheat exports in 1974-75 and high export prices. The decline of $50.5 million in estimated receipts from Broadcast Listeners' and Television Viewers' Licence Fees reflects the abolition of such fees, as announced in the Budget Speech. As also announced in the Budget Speech, wireless telegraphy fees are to be increased; the increase is estimated to yield $0.8 million in 1974-75. An estimate of $0.3 million has been included for the introduction of a tax of 2 cents per litre on liquid petroleum gas used in road vehicles. The increase in passport fees (amounting to $1.5 million in 1974-75), announced in the Budget Speech, is included in the 'other' item of $7.4 million. All interest received by the Australian Government from sources outside the Budget sector is included under this heading, together with land rents collected in the Territories and dividends received from Government-owned companies and corporations. Increased interest receipts from advances made from the Budget sector to the States, the Post Office and the Pipeline Authority account for most of the estimated increase of S105.4 million in interest receipts in 1974-75. The principal component of the estimated increase of S8.5 million in rent, dividends, etc. is the expected receipt of a dividend from Qantas Airways Limited for the first time since 1971-72. This heading covers receipts (other than taxation receipts) from public financial enterprises, such as the Reserve Bank and Commonwealth Banking Corporation. In addition, the operating revenues, net of operating expenses, of activities carried on as business type enterprises are included to the extent that the transactions are recorded in Budget sector cash accounts. Net receipts from Government enterprise transactions are estimated to decline by $7.3 million to $4.1 million in 1974-75. The main reasons for this decline are an expected deterioration in the financial position of Commonwealth Railways, despite an increase in charges from 1 July 1974, a reduction in the dividend paid by the Commonwealth Banking Corporation, and a decline of $2.8 million in net receipts from the supply of electricity in the Northern Territory. Most of the estimated increase in receipts from the sale of land and buildings in 1974-75 is attributable to an estimated increase of $14.0 million from lease sales in the Australian Capital Territory, mainly reflecting an increase in estimated disposals of serviced residential blocks. {: .page-start } page 1384 {:#debate-65} ### STATEMENT No. 5- BUDGET RESULT, 1973-74 {: .page-start } page 1384 {:#debate-66} ### SUMMARY The Budget estimates and outcome for 1973-74 are summarised in the table below: The overall Budget result was a deficit of $293 million, compared with the original Budget estimate of $687 million. Both outlays and receipts exceeded the Budget estimates. Total outlays were $12,295 million, $130 million more than the Budget estimate, while receipts were $12,002 million, $524 million more. Outlays from the 1973-74 Budget were significantly affected by large increases in wage and salary payments during the year. Direct wage and salary payments were $142 million more than allowed for in the Budget estimates. In addition, higher wage and salary costs were an important element in the increase of $65 million in the advance to the Post Office and, because the increase in average wages was faster than assumed, financial assistance grants to the States exceeded the Budget estimate by $69 million. The increase in receipts over the Budget estimate reflected, in the main, the acceleration in inflation during the year. In particular, average weekly earnings increased considerably faster than the 13 per cent assumed at Budget time, and this was the main reason why net PA YE income tax collections exceeded the Budget estimate by $298 million. {: .page-start } page 1385 {:#debate-67} ### OUTLAYS The Budget estimates for 1973-74 are compared with actual outlays in the following table: The main variations from the Budget estimates are discussed below. {:#subdebate-67-0} #### Defence Total outlays on defence in 1973-74 exceeded the Budget estimate by $63 million. Manpower costs were $97 million greater than the Budget estimate; wage and salary payments were $66 million greater than estimated, reflecting increases in rates of pay granted after the Budget, while outlays under the Defence Forces Retirement and Death Benefits Scheme exceeded the estimate by $31 million, partly because more servicemen opted to retire under the new scheme than was originally estimated and a higher proportion of those retiring opted for lump sum payments. Against this, there were shortfalls in other areas of expenditure, notably defence equipment and stores and defence facilities. Supply difficulties, both domestic and overseas (the latter reflecting, in particular, industrial unrest in the United Kingdom) led to general slippages in delivery programs and a shortfall of $20 million in expenditure on equipment and stores. Outlays on defence facilities fell short of the estimate by $19 million, mainly because of general shortages of materials and labour. {:#subdebate-67-1} #### Education Education outlays in 1973-74 were a net $11 million greater than the Budget estimate. Recurrent payments to the universities exceeded the Budget estimate by $19 million, mainly because of a change in timing of payments associated with the assumption of full financial responsibility for universities. Recurrent payments to colleges of advanced education exceeded the Budget estimate by $19 million. Outlays for schools and pre-schools in the Territories were $13 million more than estimated at Budget time, the main contributing factors being increases in wage and salary rates and larger than estimated staff numbers, particularly in the Commonwealth Teaching Service. The major shortfall in outlays on education was in payments to the States for schools and pre-schools - actual payments fell short of the Budget estimate by $24 million. The States experienced problems in carrying through to the construction stage the new building programs approved on the recommendation of the Interim Schools Committee. In addition, the larger part of the pre-schools program was not finally approved until April 1974; difficulties were also encountered in the initial negotiations with local government authorities. Capital payments for colleges of advanced education fell short of the Budget estimate by $11 million as progress on construction programs fell behind planned rates. Similarly there was a shortfall of $9 million in the capital program for technical education. {:#subdebate-67-2} #### Health Outlays for health in 1973-74 fell short of the Budget estimate by $32 million. The major shortfalls, occurred in respect of hospital and medical benefits and nursing home benefits. Hospital and medical benefits payments were $20 million lower than the Budget estimate, partly because there was a smaller than expected increase in the number of services provided and partly because of a larger than normal lag in the processing of claims by the health insurance organisations. Payments of nursing home benefits were $8 million less than the Budget estimate, mainly reflecting smaller than expected growth in the number of nursing home beds. {:#subdebate-67-3} #### Social Security and Welfare Outlays for social security and welfare were $44 million more than the Budget estimate. Age, invalid and widows pensions were $39 million more than estimated, reflecting both the Government's decision to increase pension and benefit rates in Autumn by $3 rather than the $1 .50 allowed for at Budget time and also greater than assumed increases in the numbers of pension recipients. Similarly, payments of unemployment and sickness benefits were $29 million greater than the Budget estimate and payments of supporting mothers benefit were $6 million greater. These increases were partly offset by shortfalls in several other items. In the 1973-74 Budget provision was made for a payment of $10 million for special welfare assistance for persons unemployed as a result of the 25 per cent tariff cut, but in the event there were few applications for assistance and very little was spent. Payments for aged persons accommodation were $6 million less than the estimate, reflecting delays in building commencements. The child care program was also affected by slippages in construction programs and initial difficulties in negotiations with local government authorities, and consequently outlays were $6 million less than estimated at Budget time. {:#subdebate-67-4} #### Housing Total outlays for housing fell short of the Budget estimate by $12 million. The major part of this shortfall was in grants to Aboriginal housing associations for the construction and purchase of homes for Aboriginal families. These were $9 million lower than the Budget estimate, mainly because of delays in the establishment and commencement of operations of the associations. *Urban and Regional Development nec and the Environment* Outlays within this function, which covers the major initiatives of the Government announced in the 1973-74 Budget in respect of financial assistance for growth centres, sewerage programs, Land Commissions and metropolitan area improvement programs, fell short of the Budget estimate by $43 million. Delays in finalising arrangements with the State Governments of New South Wales and Victoria, followed by further delays in the introduction of legislation in those States, resulted in outlays for the Albury/Wodonga growth centre being only $2 million in 1973-74 compared with the Budget estimate of $9 million. Similarly, delays in finalising arrangements with the States meant that outlays for other growth centres were only $4 million compared with the Budget estimate of $24 million. Outlays in respect of Land Commissions totalled $11.5 million compared with the Budget estimate of $30 million. Only in South Australia was a land commission set up in 1973-74 and $8 million was provided to that State as a result; the remaining $3.5 million was in respect of the acquisition, in conjunction with the Victorian Government, of Emerald Hill. Most of the amounts provided in the Budget for sewerage and the western sectors of Sydney and Melbourne were spent during the year. {:#subdebate-67-5} #### Transport and Communication Total outlays for transport and communication were $12 million less than the Budget estimate of $881 million. Expenditure on the Gidgealpa pipeline project fell $41 million short of the Budget estimate because of changes in the scope of the construction program and construction and other delays. Grants to the States for urban public transport were estimated to amount to $32 million at Budget time, but as Parliament adjourned earlier than expected the necessary legislation was not passed and the grants could not be paid (although the States had carried out part of the spending program involved). Commonwealth Railways' capital outlays were $6 million less than estimated, the largest single cause being delays in completing an agreement for the construction of the Tarcoola-Alice Springs railway. An increase of $65 million in the advance to the Post Office partly offset these shortfalls; this resulted largely from increases in wages and salaries and associated additional superannuation liabilities. Increases in wage and salary rates were also the main reason for an excess of $9 million above the Budget estimate in administrative and operational costs associated with the provision of civil aviation services. {:#subdebate-67-6} #### Water Supply and Electricity Of the shortfall of $9 million in this function, the advance to the Queensland Government for the Gladstone power station accounted for $7 million. The slower than expected rate of construction of the power station resulted from a combination of industrial disputes, material shortages and adverse weather conditions. {:#subdebate-67-7} #### Industry Assistance and Development Total payments to assist and develop industry were $32 million less than the Budget estimate. Assistance for *pastoral and agricultural industries* exceeded the Budget estimate by $1 million, the net result of changes in several items. Rural reconstruction advances fell short of the Budget estimate by $1 1 million, there being a slower rate of applications for assistance than forecast. This and a number of smaller shortfalls were more than offset by payments of fertiliser bounties exceeding the Budget estimate by $20 million. The extra bounty payments were caused by increased purchases of fertilisers arising partly from improved rural conditions, partly from an impending rise in the price of superphosphate and partly from the announcement of the removal of the bounty on superphosphate in December 1974. Total payments for *manufacturing industry* were $30 million less than the Budget estimate. Net payments for shipbuilding assistance fell short of the Budget estimate by $10 million; fewer large ships were built during the year than anticipated at Budget time. An amount of $10 million was provided in the Budget for industry assistance following the 25 per cent tariff cut in July 1973, but no assistance was required up to 30 June 1974. Export incentive payments were $6 million less than originally estimated because of delays in processing of applications. {:#subdebate-67-8} #### Labour and Employment Outlays in respect of labour and employment were $1 million less than the Budget estimate. The only major shortfall was in the $5 million provided for training and other assistance following the 25 per cent tariff cut, most of which was not required. The main offsetting increase was in administrative expenditure and resulted from increases in wage and salary rates. {:#subdebate-67-9} #### Legislative Services Payments for legislative services exceeded the Budget estimate by $10 million. The additional costs of the House of Representatives election and the referenda accounted for $5 million of this increase. {:#subdebate-67-10} #### Foreign Affairs and Overseas Aid Total outlays on foreign affairs and overseas aid was $1 million less than the Budget estimate. However, within the function there were some significant offsetting variations from the original estimates. The main increase was consequent upon higher than assumed wheat prices, which increased the cost of Australia's food aid commitment under the International Wheat Agreement by $13 million. In addition, payments of salaries and allowances to members of the Australian Staffing Assistance Group in Papua New Guinea were $4 million higher than estimated. On the other hand, Colombo Plan aid payments were some $1 1 million less than the Budget estimate and the payment to Papua New Guinea to facilitate the creation of a government commercial bank was $5 million less than expected at Budget time. {:#subdebate-67-11} #### Administrative Services Outlays on administrative services were $29 million more than the Budget estimate. The costs of wage and salary increases since the Budget accounted for most of the increase. The main non-salary increase was $4 million in expenditure on rentals for government offices, arising from new leases and increased rents. *Payments to or for the States and Local Government Authorities nec and Natural Disaster Relief* Total payments to or for the States and local government authorities nec and natural disaster relief were $106 million greater than the Budget estimate. Financial assistance grants to the States exceeded the Budget estimate by $69 million because average wages increased considerably more rapidly than the 12 per cent assumed at Budget time. Payments for relief and restoration measures following the floods that occurred in Queensland and New South Wales in the early part of 1974 amounted to $29 million in 1973-74; no allowance was made in the Budget for disaster relief payments. {: .page-start } page 1389 {:#debate-68} ### RECEIPTS The Budget estimates for 1973-74 are compared with actual receipts in the following table: The main variations from Budget estimates are discussed below. {:#subdebate-68-0} #### Customs Duty Collections of customs duty exceeded the Budget estimate by $41 million. The normal difficulties in estimating customs duty were accentuated in 1973-74 by changes in currency parities and tariff rates, including the 25 per cent reduction in all protective tariffs in July and the exchange rate appreciation in September. Reflecting these changes and the high level of consumer demand, dutiable imports were greater, especially in the second half of the year, than had been assumed in arriving at the Budget estimate. {:#subdebate-68-1} #### Sales Tax Sales tax collections were $80 million more than the Budget estimate. The main cause of the higher collections was greater than assumed price increases of taxable goods. Sales volumes for most classes of goods were also greater than assumed. *Income Tax - Individuals - Pay-as-you-earn* Gross collections of PAYE instalment deductions were $323 million above the Budget estimate. The main factor was that, whereas at Budget time it had been assumed that average weekly earnings would increase by 13 per. cent in 1973-74, the actual increase was 16.3 per cent. In addition, average employment increased by 4.5 per cent rather than 3.5 per cent as assumed in the formulation of the Budget estimate. PAYE refunds were $27 million up on the Budget estimate. {:#subdebate-68-2} #### Income Tax - Individuals - Other Collections on assessments of income tax on individuals exceeded the Budget estimate by $13 million, because property incomes and other business incomes in 1972-73 (assessed to tax in 1973-74) were slightly higher than estimated at Budget time. {:#subdebate-68-3} #### Income Tax - Companies Company tax collections were $91 million more than the Budget estimate. Company incomes in 1972-73 (which were subject to tax in 1973-74) increased by 25 per cent, a much larger increase than indicated by the preliminary data available when the Budget was prepared. {:#subdebate-68-4} #### Other Taxes, Fees and Fines Collections of other taxes, fees and fines exceeded the Budget estimate by $4 million. Following higher than expected wheat prices for the 1973-74 crop, $10 million was collected from the wheat export charge in 1973-74; no allowance was made in the Budget for collections of this charge. Wool tax collections exceeded the Budget estimate by $5 million because wool prices were higher than originally assumed. Collections of the meat exports charge were $7 million less than the Budget estimate, partly because the scheme was introduced later in the year than anticipated, and partly because of the slowing down of beef exports during the year. {:#subdebate-68-5} #### Sale of Land and Buildings Proceeds from the sale of land and buildings were $33 million less than the Budget estimate. Proceeds from lease sales in the Australian Capital Territory were $34 million less than the estimate, mainly reflecting a change in the system of land disposal in Canberra. There was also a smaller turn-off of serviced blocks than planned. {: .page-start } page 1390 {:#debate-69} ### FINANCING TRANSACTIONS The following table presents a summary of financing transactions in 1973-74: Some details of the 1973-74 financing transactions are given below: *Net Drawings under Credit Arrangements for Defence Purchases in the United States of America* The *Loan (Defence) Acts* of 1966, 1968, 1970, 1971 and 1973 authorised the Government to finance defence equipment purchases in the United States of America on extended payment terms. In 1973-74 no drawings were made under these arrangements. Repayments of previous drawings were $54 million. *Net Drawings under Credit Arrangements - Qantas Airways Limited and the Australian National Airlines Commission* Drawings on aircraft loans arranged on behalf of Qantas and the Australian National Airlines Commission amounted to $10 million and $6 million respectively; repayments of previous drawings for Qantas were $21 million and for the Australian National Airlines Commission $6 million. {:#subdebate-69-0} #### Net Proceeds of Other Overseas Borrowing There were no public loan raisings overseas in 1973-74. Redemptions and other expenditure on the reduction of debt overseas totalled $66 million. One maturity in London was redeemed at a cost of $12 million. Securities to the value of $31 million were repurchased in New York, Germany, London and Canada. Repayments of $7 million were made on borrowings from the International Bank for Reconstruction and Development and $15 million on borrowings from the United States Export-Import Bank *Net Proceeds of Loan Raisings in Australia* Three Government public cash loans were raised in Australia in 1973-74. Excluding loan proceeds from advance subscriptions received up to 30 June 1973 but including receipts from outstanding instalments and advance subscriptions received up to 30 June 1974, the proceeds from these cash loans totalled $1,145 million. Cash proceeds from the sale of Special Bonds during the year totalled $454 million. Proceeds of $49 million from State domestic loan raisings and $3 million from Drought Bonds brought total cash proceeds from loans raised in Australia to $1,651 million. Of the $667 million of securities (other than Special Bonds) maturing in Australia which were offered for conversion in 1973-74, an amount of $461 million was redeemed. Redemptions of Special Bonds of all series amounted to $371 million. Market repurchases amounted to $6 million, bringing total redemptions and repurchases to $837 million and net proceeds of loans raised in Australia in 1973-74 to $814 million. *Net Change in Treasury Notes on Issue* As at 30 June 1974 Treasury Notes on issue amounted to $387 million, a net decrease of $38 million on the amount on issue at 30 June 1973. {:#subdebate-69-1} #### Other Financing Transactions An amount of $127 million was available from these transactions. The largest item was $72 million relating to Post Office Superannuation. An amount of $42 million was released from the Defence Forces Retirement Benefit Fund following the replacement of the scheme by an unfunded scheme as recommended by the Jess Committee; a further $15 million was available from coinage transactions. {:#subdebate-69-2} #### Residual Financing The amount available from the financing transactions mentioned above exceeded the deficit by $480 million so that Government cash balances increased by this amount. {: .page-start } page 1392 {:#debate-70} ### STATEMENT No. 6 - BUDGET TRANSACTIONS SINCE 1964-65 {:#subdebate-70-0} #### Introduction This Statement discusses trends in Budget transactions since 1964-65 and presents, for the first time, a historical series of outlays classified by function. Two complementary methods of classifying Budget outlays are used throughout the Budget Speech and Statements, each of which is important in analysing the use and direction of resources in the Budget. The *functional classification,* used for the first time in last year's Budget documents, categorises Budget outlays according to their primary objectives or purposes. In highlighting the broad purposes for which outlays are made, the functional classification is a particularly important development as an aid in the decision-making process. The *national accounting classification* details Budget outlays by economic type and facilitates the comparison of Budget aggregates with the Australian National Accounts. This is the more useful classification for assessing the overall economic impact of the Budget. {:#subdebate-70-1} #### Functional Classification In bringing together categories of outlays with similar objectives or purposes, the functional classification aims to reveal more fully information on the nature of Government activities and the share of resources devoted to particular objectives. It also provides a logical framework within which programs can be developed to facilitate an assessment of the effectiveness of outlays in meeting objectives. An added advantage is the use of national accounting conventions for the definition of Budget outlays and receipts. This means that the figures used for the analysis and discussion of outlays by function are in line with those used in the analysis of the economic impact of the Budget. The introduction of the functional classification and the concurrent adoption of national accounting conventions resulted in a number of important changes in the definition of Budget aggregates such as Total Outlays' (formerly Total Expenditures) and 'Total Receipts'. Further information on these changes is given in the Appendix to the Budget Statements. When the functional classification of outlays was introduced in the 1973-74 Budget Speech it was only possible to present detailed historical data in the new format for the years 1970-71 to 1972-73. Functionally classified historical Budget data for the years 1964-65 to 1969-70 have now been compiled, and a series covering the period 1964-65 to 1974-75 is presented in summary form in Table 1 on page 115, and in more detail in Table 2 on pages 116 to 122 and Table 4 on page 124. The functional classification is essentially a re-classification of appropriation data, supplemented where possible with sub-costings of appropriation items of substantial magnitude that cover several functions. However, the amount of detail shown in Table 2 has been reduced in comparison with that in Statement No. 3, for ease of presentation and because the sub-costings necessary to eliminate the effects of all changes in accounting procedures and administrative arrangements are not always available. To the extent possible the definitions and concepts used in constructing this series are the same as those used in Statement No. 3. **Major discontinuities** are indicated by footnotes or referred to in the following text. {:#subdebate-70-2} #### Budget Sector Outlays Outlays by the Australian Government Budget Sector increased at an average annual rate of 11 .0 per cent over the period 1964-65 to 1973-74, but within that period there were some significant changes in the rates of growth and relative size of the various functional categories of outlays. The distribution of total outlays between the broad functional categories and changes in that distribution from year to year provide some indication of the importance attached to particular expenditure programs and focus attention on changing objectives and priorities of public expenditure. Comparison of trends in outlays shown in the tables are affected by the following factors. {: type="a" start="a"} 0. Figures for 1971-72 and subsequent years for General Revenue Assistance to the States and for total outlays are not strictly comparable with earlier years. The more recent figures are affected by the transfer of pay-roll tax to the States, with effect from 1 September 1971, and concurrent reductions in General Revenue Assistance to offset most of the loss in revenue incurred by the Australian Government Budget Sector. 1. Increases in special purpose payments to the States are recorded under the appropriate functional heading, while 'offsetting adjustments' to General Revenue Assistance Grants to the States are taken into account in the function *Payments to or for the States and Local Government Authorities nec and Natural Disaster Relief.* In 1973-74 the take-over of full responsibility for financing universities and colleges of advanced education by the Australian Government contributed to an increase in outlays classified to *Education,* but also involved a compensating decline in general purpose funds provided to the States. This means that the rate of increase in Australian Government resources devoted to education, as shown in the function *Education,* is somewhat overstated. There will be a similar effect in 1974-75 because the new tertiary education arrangements apply for the whole of that year whereas they applied for only half of 1973-74. 2. Figures for 1973-74 and subsequent years under the function *Defence,* and under the receipts heading *Other Taxes, Fees and Fines - Unfunded Retirement Benefits Contributions* are affected by the changes in the operation of the Defence Forces Retirement and Death Benefits, Ministerial Retiring Allowances and Parliamentary Retiring Allowances Schemes. These changes involved a move from funded schemes to unfunded benefit schemes. 3. The figures are in current prices, meaning that they do not directly reflect the rate of increase in resources devoted to particular functional categories. Furthermore, differential rates of price increase between both functional categories and economic types of outlays will distort comparisons of relative growth rates in outlays within and between functions. These difficulties also apply to comparisons between public and private sector outlays. A comparison of outlays in the years 1964-65 and 1973-74 is given in the table below. Tables No. 1 and 2 attached to this Statement show these amounts classified to 'Payments to the States etc.' instead of 'Housing'. However, for the purposes of the calculation of the trend rate of growth and the chart of proportions of total outlays which follows, the amounts have been included in the function 'Housing'. Average annual rates of increase can mask movements within the period and can be distorted by a heavy concentration of outlays at the end of the period. The chart below shows the proportion of total outlays within the major functional groups in each year of the period. Drawing on the more detailed information given in Table 2, comment on some features of the table and chart is given below. *Defence* outlays grew from 12.9 per cent of budget outlays in 1964-65 to 17.1 per cent in 1967-68 with payments for the F111C fighter bomber, other re-equipment programs and Australian involvement in the Vietnam conflict. Withdrawal from Vietnam, cessation of National Service, the tapering off of payments on equipment programs and reductions in Service and civilian personnel in 1973-74 resulted in the decline to 10.9 per cent of total outlays in 1973-74. The increase in outlays on *Education, Health* and *Social Security and Welfare* has accounted for approximately 40 per cent of the increase in total outlays between 1964-65 and 1973-74. Over that period, outlays on these functions have grown from 28 per cent of total outlays to 35 per cent. Outlays relating to universities and colleges of advanced education have risen approximately eight-fold over the period, reflecting the takeover of financial responsibility by the Australian Government, expanded student assistance programs and increased allowances, and increased grants for recurrent and capital purposes associated with a growing student population. Recently, increased government assistance has been directed to teacher education, primary and secondary education and pre-school and child care services. Until recently, the greater part of the increase in outlays on health was on benefits to reduce the costs of treatment but outlays on the provision, and in some cases operational costs, of health facilities throughout Australia are now increasing strongly. The cost of providing assistance to the aged, ex-service men and women, the handicapped and other disadvantaged groups in the community is reflected in the average annual rise of 11.7 per cent in outlays on Social Security and Welfare. Adjustments to the levels of benefits, together with additional benefits and subsidies introduced over the years to cater for the welfare needs of the community, are the main factors contributing to this increase. The average annual rate of growth in *Housing* outlays has been 7 per cent. The proportion of total outlays on this function has fallen from 3.6 per cent to 2.7 per cent over the period. However, a greater proportion of outlays has been directed towards providing general housing assistance under Commonwealth State Housing Agreements (or in their place, Loan Council borrowing programs in 1971-72 and 1972-73) and direct assistance in the Australian Capital Territory and the Northern Territory. The change in eligibility provisions for defence service home loans has reversed the downward trend in housing assistance under the Defence Service Homes scheme, while the slow down in the assisted immigration program is reflected in the sharp decline in the cost of providing accommodation for migrants. Although outlays on *Urban and Regional Development nec and the Environment* have accounted for only 1 .7 per cent of the total increase in outlays since 1964-65, and represented only 1.2 per cent of total outlays in 1973-74, this is the fastest growing function in the Budget (25.9 per cent annual average increase). This reflects recent initiatives in the area of growth centres development, sewerage programs and environmental protection. Prior to 1971-72, most outlays classified under this function were directed towards providing urban facilities in Canberra and the Northern Territory. Net outlays on *Transport and Communication* have increased at an average annual rate of 9 . 4 per cent over the period. Outlays on communications, expansion of assistance provided under the Commonwealth Aid Roads legislation and more recently, outlays on the construction of pipelines for natural gas and other materials have been significant factors in this growth. Gross and net outlays on air transport have also grown over the period. Gross advances to the States for railway standardisation projects, which increased in the early part of the decade, are offset by repayments resulting in a fall in net outlays for such purposes, in recent years. The decline in outlays on *Water Supply and Electricity* at an average annual rate of 3.8 per cent reflects progress towards the completion of the Snowy Mountains Hydroelectric Scheme and the completion of a number of electricity and water supply projects in the Northern Territory and the Australian Capital Territory. The decline has been offset to some extent in recent years by advances in connection with the construction of the Gladstone power station. Outlays on *Industry Assistance and Development* have fluctuated widely over the period. In the category of Agricultural and Pastoral Industries, this has been the result of changing market and climatic conditions together with changes, as in the case of the wheat industry, in stabilization and subsidy arrangements. The recent removal or scaling down of a number of subsidy arrangements will have a substantial impact on outlays under this function in future years. By convention, receipts from certain industry levies (e.g., wool tax) are classified as 'Receipts' and not offset against outlays under this function. Outlays on *General Public Services,* which relate in the main to the normal functioning of government, as well as overseas grants and advances for development purposes, have maintained a relatively constant share of total budget sector outlays over the period. Within the *Foreign Affairs and Overseas Aid* category, assistance to Papua New Guinea and bilateral aid payments have been the major factors contributing to the increase. *Payments to or for the States and Local Government Authorities nec and Natural Disaster Relief* have declined as a proportion of total budget outlays from 25.3 per cent in 1964-65 to 22.5 per cent in 1973-74. However, expenditure classified under this category excludes payments for specific purposes such as universities, schools and nursing homes, which are included under the relevant functional heading. {:#subdebate-70-3} #### Budget Sector Receipts Details of Australian Government Budget Sector receipts for the period 1964-65 to 1 973-74, together with 1974-75 estimates, are presented in Table 4 on page 124. Data on the composition of Budget receipts in 1964-65 and 1973-74 are shown in the following table. The chart below gives an indication of the relative importance of the various categories of receipts in total Budget sector receipts over the ten years ffrom 1964-65. By far the most important single category of receipts is income tax on individuals, which has accounted for over half the increase in the period, rising from 36. 1 per cent of total revenue in 1964-65 to 45.7 per cent in 1973-74. The increase has been determined to a large extent by the growth in net pay-as-you-earn income tax from wage and salary earners, reflecting the effects of the progressive rate scale in a period of strong growth in wage and salary incomes, despite adjustments to the rate scale in 1970-71 and 1972-73. Customs and excise duties have steadily declined as a proportion of total receipts, whilst sales tax has formed a relatively constant proportion of total receipts. Pay-roll tax revenue after 1972-73 relates to collections in the Australian Capital Territory and Northern Territory only. This is the result of the transfer of this tax from the Australian Government to the States in 1971. The major items contributing to the average annual increase of 10.1 per cent in 'Other Taxes, Fees and Fines' are broadcasting and television licences and receipts in the form of unfunded retirement benefit contributions following changes to the operation of the Defence Forces Retirement and Death Benefits, Ministerial Retiring Allowances and Parliamentary Retiring Allowances Schemes. In the category 'Interest, Rent and Dividends', the most significant increase has been in interest receipts from the Australian Post Office. Similarly, the impact of profits received from the Reserve Bank has largely determined the overall pattern in the net receipts from Government Enterprise Transactions. {:#subdebate-70-4} #### The Budget Deficit Table 1 shows the Budget deficit in each of the years from 1964-65 to 1974-75. This aspect is discussed later in this Statement under the sub-heading 'The Overall Budget Result'. {:#subdebate-70-5} #### National Accounts Classification The national accounts for the economy as a whole aim at providing a systematic summary of the transactions that take place within the economy, especially of those that relate to the production and use of goods and services, and to transfers of income or capital between sectors of the economy. The national accounts classify transactions into suitable categories and, by outlining the relationships between the categories, enable analysis of the processes by which production and expenditure are linked. Traditional methods of presenting estimates of public sector receipts and expenditure grew out of the requirement for maintaining parliamentary control over government spending. Estimates presented in a form suitable for this purpose do not necessarily lend themselves to an assessment of the economic impact of government financial activity. By presenting Budget sector data on a basis which is conceptually consistent with, and more easily related to, the National Accounts for the economy as a whole, the National Accounting presentation of Budget transactions by economic type clarifies the nature of transactions between the public sector and the rest of the economy. The classification also provides a consistent framework within which the aggregation of Australian Government and State and local authority outlays and receipts is facilitated, to produce consolidated figures for the public sector as a whole. There is no single measure of the economic importance of government transactions. In terms of national accounting categories, the most direct influence that Budget outlays have on demand within the economy is by means of expenditure on final goods and services, i.e. the resources used in the provision of public goods such as defence, education, health and community amenities. Transfers and advances from the Budget to other sectors are also important, but the impact on economic activity of these outlays depends on the reaction of the recipients of the transfers and advances. For Budget receipts, it is likewise true that any assessment of their effect on the economy has to take into account the varying impact of different taxes and other receipts. The total impact of the Budget is an amalgam of all these influences. {:#subdebate-70-6} #### Australian Government Outlays The contribution of the Australian Government and its authorities - as distinct from State and local governments - to recent growth in the size of the public sector has been dominated by the transactions of the Budget sector. In 1973-74, for example, the Budget's direct call on resources, in the form of final expenditure on goods and services, represented over 80 per cent of final expenditure by the Australian Government sector as a whole. Advances from the Budget to Australian Government authorities also finance a significant part of final expenditures on goods and services recorded in the non-Budget sector. Expenditure on goods and services, however, represents only a moderate and, in recent years declining, proportion of total Budget outlays. The majority of the Australian Government's budgetary transactions are transfer payments and advances to other sectors of the economy, including other government sectors. In 1973-74 transfer payments and net advances accounted for as much as 75 per cent of total Budget outlays, of which close to half represented grants and net advances to State Governments. Table 3, attached to this Statement, shows Budget outlays since 1964-65 on a national accounts basis, while Table 4 shows information on Budget receipts and Table 6 gives details of financing transactions. On this basis, transfers between different parts of the accounts of the Australian Government are eliminated and additional detail included so that the figures shown relate to the transactions which occur between the Australian Government and the rest of the economy, including other levels of government, and overseas. The national accounts figures therefore show government transactions classified into economically significant categories comparable to those presented in the White Paper *National Income and Expenditure* 1973-74. Over the past decade there has been a tendency for Australian Government Budget outlays to grow somewhat faster than expenditures in the economy as a whole. The following table compares the average annual rates of growth of the main components of Budget outlays with the average annual rate of growth in gross national expenditure for the period since 1964-65. Over the nine-year period, the major elements of Budget outlays, except for net advances, increased more rapidly than gross national expenditure. Total transfer payments have grown strongly over the period, and rather faster than direct expenditure on goods and services, both current and capital, which have grown at much the same annual average rate. The patterns of growth of direct expenditure and transfers have also differed. Mainly as a result of fluctuations in defence expenditure, current expenditure on goods and services grew more rapidly in the period 1964-65 to 1968-69 (16.3 per cent per annum) than in the period since 1968-69 (10.9 per cent per annum). Similarly, the average annual rate of growth in capital expenditure declined from 15.4 per cent in the first period to 9.7 per cent in the second. On the other hand, growth in total transfer payments accelerated from an annual average of 9. 1 per cent in the first period to 16.5 per cent in the second. Taking the period as a whole, the Budget's *direct* call on resources, as measured by final expenditure on goods and services, grew strongly from 5 . 5 per cent of gross national expenditure in 1964-65 to 7.2 per cent in 1968-69, but declined thereafter to 6.2 per cent by 1973-74. In assessing the total economic impact of the Budget on *final* demand for goods and services it is not, however, sufficient to look only at its *direct* call on goods and services. This is because, as noted previously, the larger proportion of Budget outlays is in the form of transfer payments, such as payments of pensions, subsidies, interest and grants, and the call on resources from such payments depends on the uses to which the recipients put the funds. Other Budget outlays take the form of advances and the economic impact of these is different again. Consequently, it is necessary to take account of variations in the composition of total outlays in analysing the Budget's impact. Expenditure on goods and services declined as a proportion of total Budget outlays from a peak of 29.5 per cent in 1968-69 (associated with the strong growth in defence spending in the preceding years) to 24.8 per cent in 1973-74. Conversely, cash benefits to persons consistently increased as a percentage of total outlays from a low of 20.5 per cent in 1967-68 to 25 per cent in 1973-74. Although it is not possible to specify precisely the final use of funds transferred from the Budget in this way, it is well known that many of the recipients of these benefits have very high marginal propensities to spend and thus this category of outlays is likely to have a fairly immediate and strong influence on final demand for consumption goods. A major proportion of Australian Government outlays comprises payments to the States. Because of changes from time to time in the methods of making such payments, it is more useful to look at 'Grants to the States' and 'Net Advances to the States' as one category. Considered as a whole, payments to the States have normally accounted for about one-third of Australian Government Budget outlays. Over the last ten years, the lowest proportion was 31.2 per cent in 1968-69 and the highest 34.0 per cent in 1973-74. These outlays are to finance, *inter alia,* the States' health and education services and their works and housing programs. As with cash benefits, it is not practicable to trace through precisely the final use of all these funds from the Budget. Moreover, the timing of outlays by the States can differ from the timing of payments to them of funds to finance those outlays. In the recent economic situation, for example, the timing of outlays has been affected by problems in finding resources of men, materials and equipment with which to undertake projects and programs financed by the Australian Government. Advances other than to the States are chiefly distributed within the Australian Government sector itself in the form of advances to government instrumentalities operating outside the Budget. These include the Post Office, the Overseas Telecommunications Commission, the Australian National Airlines Commission, Qantas Airways Limited, and the Snowy Mountains Hydro-electric Authority. Advances to such authorities in 1973-74 amounted to $468 million or 3 . 8 per cent of budget outlays. Again, it is not practicable to trace through the precise utilisation of the funds advanced to these instrumentalities from the Budget. It is, however, possible to offset transfers between the Budget and non-Budget sectors of the Australian Government and to consolidate outlays, other than inter-sector transfers, to form a statement of the outlays and receipts of the Australian Government sector as a whole. The method of consolidation used is outlined in the Supplement to the Treasury Information Bulletin *National Accounting Estimates of Receipts and Expenditure of Australian Government Authorities,* presented concurrently with the Budget documents. Table 5, attached to this Statement, sets out national accounts estimates of the main categories of receipts and outlays of the Australian Government sector as a whole for the period since 1964-65. Total outlays by the non-Budget sector amounted to $1,028 million in 1973-74. There are substantial differences between the relative composition of outlays of the Australian Government sector as a whole and that of the Budget sector alone. The following table details the composition of outlays for 1973-74. As the table shows, final expenditure on goods and services represents a greater proportion of total Australian Government outlays than of Budget outlays. The greater outlays of the non-Budget authorities for capital purposes lift capital expenditure from 2.3 per cent to 8 . 3 per cent of total outlays. There are consequent declines for transfers and advances. {:#subdebate-70-7} #### Total Public Sector Direct Expenditure or Goods and Services Taking into account State Governments and local authorities, the relative size of public sector direct expenditure on goods and services has not changed greatly in recent years. The following table shows the trend in the public sector's relative take-up of final goods and services over the period since 1964-65. As shown in the table, there was a marked lift in the proportion of public sector direct demands on resources to total final demand in the four years to 1967-68, reflecting, among other things, increased defence expenditure. Over the next three years the proportion remained fairly steady at around 21 .7 per cent before rising again in 1971-72 and 1972-73. This rise largely reflected decreased demand for resources by the private sector as economic activity slowed. The Australian Government Budget for 1973-74 seemed likely to increase the share of resources going to the public sector, but this was nullified by booming activity in the private sector. The growth pattern of *final consumption* expenditure on goods and services, however, has differed from that of *capital* expenditure. In most years since 1964-65, public sector final consumption expenditure has grown at a faster rate than gross national expenditure, the ratio of the two increasing steadily from 10.4 per cent in 1964-65 to 13.7 per cent in 1973-74. Public capital expenditure growth has been more erratic; its share of gross national expenditure reached a peak of 9.8 per cent in 1965-66, and has since fluctuated around a generally declining trend to a low-point of 7.9 per cent in 1973-74. {:#subdebate-70-8} #### Budget Receipts Total budget receipts in national accounts terms have increased at an annual average rate of 11.5 per cent over the period from 1964-65, rising from 22.2 per cent of gross domestic product to 24.1 per cent in 1973-74. These receipts comprise taxes of various types together with a number of other charges, interest, rent and dividends. As with outlays, different types of receipts have different effects on the economy. Taxes on incomes, for example, influence private demand for goods and services by determining the level of disposable incomes; sales taxes, on the other hand, affect private demand through the prices of goods. Consequently, the 'mix' of Budget revenues, as well as their total size, needs to be considered in any assessment of the overall impact of the Budget on the economy. Trends in the different types of receipts were outlined in the previous section. Total taxation revenues increased at an annual average rate of 11.8 per cent over the period. Within this total, revenue from individual income taxation has increased at an average rate of 14.2 per cent, whereas the rate of increase in indirect taxation revenue has been only 8 . 6 per cent. The relatively slow growth in indirect taxation is partly the result of the transfer of pay-roll tax to the States as from 1 September 1971. {:#subdebate-70-9} #### The Overall Budget Result The Australian Government has consistently incurred a deficit on its budgetary transactions over the decade 1964-65 to 1973-74. The size of the deficit, however, has varied from year to year, reaching a peak of $709 million in 1972-73 and a low of $10 million in 1970-71. The largest absolute increase in the deficit- $575 million- occurred in 1972-73. In 1967-68 the deficit was 2.6 per cent of gross national expenditure, the highest proportion over the period. Historical information on the domestic budget result *(see* Statement No. 1) is available only for the years since 1968-69. This is shown in the following table, along with the overall Budget result for the same years. In each of the four years 1968-69 to 1971-72, Budget domestic transactions resulted in a surplus, the largest occurring in 1970-71. In 1972-73 there was a marked turnaround of $620 million, resulting in a domestic deficit of $215 million. In 1973-74 the domestic result was a surplus of $211 million. The main financing transactions undertaken to meet the deficits in the Budget over the period have been domestic and overseas loan raisings, the issue of Treasury Notes, and temporary borrowings from the Reserve Bank. Details of these financing transactions are given in Table 6 attached to this Statement. Notes on Tables To the extent it is practical, the historical data has been adjusted to eliminate major breaks in series. However, some important changes which affect year to year comparability cannot be readily removed. At the Premiers' Conference in June 1971 it was agreed that the Australian Government would cease to levy pay-roll tax in the States as from 1 September 1971 and that the States would levy their own pay-roll taxes as from the same date. This decision resulted in a reduction in Australian Government pay-roll tax revenues estimated at $253 million in 1971-72. To offset most of this loss in revenue, financial assistance grants paid to the States in 1971-72 were reduced. The full-year effect of these transfer arrangements is reflected in the 1972-73 figures for outlays and receipts. The transfer arrangements had the effect of reducing the growth of outlays and receipts below the rate that would otherwise have been recorded by approximately 3 percentage points in 1971-72 and about 1 percentage point in 1972-73. The figures shown in the Tables reflect these lower growth rates. Comparisons between 1972-73 and subsequent years will not, of course, be affected by the transfer since no significant effects of the changeover continued beyond 1972-73. Other areas where accounting changes or changes in administrative arrangements affect comparability of the series over time include; offset adjustments to General Revenue Payments to the States consequent upon the assumption by the Australian Government of financial responsibility for certain activities; alterations in some retirement benefit arrangements from funded to unfunded schemes; and changes in the form of grants and advances to the States which were ultimately utilized for housing purposes. These major changes are referred to in the text, particularly on page 102, and in footnotes to the tables. Notes on Table 3: Figures in National Accounts Terms - Budget Sector Outlays *Net Expenditure on Goods and Services* This heading covers direct purchases of domestic output and imports, and includes wages and salaries of government employees and pay and allowances of defence forces. Any recoupments of such expenditures from other sectors of the economy or overseas are netted off. Current and capital expenditure are shown separately. In accordance with national accounting conventions, the cost of purchasing equipment for defence purposes is classified as current expenditure. {:#subdebate-70-10} #### Transfer Payments Current payments to other parts of the economy or overseas, other than payments for goods or services supplied, but including the purchase of existing assets, are listed in their various forms under this heading. {:#subdebate-70-11} #### Net Advances Loans, advances and additional capital made available by the Australian Government are shown in the respective items under this heading. Repayments of loans and advances are deducted to arrive at the net figures. Notes on Table 5: Australian Government Sector The method of presentation of national accounting estimates and expenditure for the Australian Government sector as a whole is discussed in Chapter II of the Supplement to the Treasury Information Bulletin, *National Accounting Estimates of Receipts and Expenditure of Australian Government Authorities.* Notes on Table 6: Financing Transactions The following notes explain the composition of some headings in Table 6, which summarises the Australian Government's financing transactions. {: type="a" start="a"} 0. The figures for loan proceeds and drawings on credit arrangements include the actual cash proceeds from loans, etc., credited to Loan Fund in 1973-74, or their equivalents for earlier years. The figures for loan proceeds in Australia include amounts raised through State domestic loan raisings but exclude amounts subscribed by the Australian Government to Special Loans. 1. The redemption and repayment items, both 'Overseas' and 'Australia', consist of outlays incurred in reducing the amount of debt outstanding (other than temporary borrowings by way of Treasury Bills and Notes). They include outlays on redemptions, repurchases and repayments from the National Debt Sinking Fund and outlays on redemptions, etc., from Loan Fund, from the Consolidated Revenue Fund and from the Canadian and Swiss Loan Trust Accounts. {: .page-start } page 1419 {:#debate-71} ### APPENDIX TO THE BUDGET STATEMENTS - THE FUNCTIONAL CLASSIFICATION OF BUDGET OUTLAYS The functional classification of budget outlays was used for the first time in the Budget Statements in 1973-74. The basic aim of the functional classification is to bring together outlays with like objectives or purposes. In this way it aims to reveal more fully information on the nature of government activities and the share of resources devoted to particular objectives, and to facilitate assessment of the effectiveness of outlays in meeting objectives. Compared with the previous classification, the functional classification has the added value of being based on national accounting conventions. There is thus a consistent conceptual basis underlying both the economic classification and the functional classification. This removes a considerable source of confusion which existed in budget documents prior to 1973-74 when two conceptually different classifications were used - the so-called 'conventional' classification and the national accounting classification. Basis of the Functional Classification The conventions and principles used in the functional classification are essentially those set out for the classification of outlays by the purpose of government in the publication *A System of National Accounts,* United Nations, New York 1968. That classification is a widely accepted international standard for the classification of public expenditure by function and is also being used by the Organisation for Economic Co-operation and Development as a basis for the development of internationally comparable statistics on the public sector. The Australian Bureau of Statistics has concurrently adopted these conventions and principles for purpose classifications in the documents it publishes on public authority finance. As a result of close co-operation between the Bureau of Statistics and the Treasury in the development of this classification structure, the major functional headings adopted for budget purposes are conceptually consistent with those used by the Statistician in his publications. It should be noted, however, that the figures published by the Bureau for Australian Government outlays cover both budget outlays and outlays by Australian Government authorities which operate outside the budget sector and hence will differ in some respects from the figures shown for the budget sector in the Budget Statements. Information on the transactions of authorities operating outside the budget sector is shown in the Supplement to the Treasury Information Bulletin entitled *National Accounting Estimates of Receipts and Expenditure of Australian Government Authorities* which is published concurrently with the budget documents. In addition, a number of Australian Government departments and instrumentalities which operate in Papua New Guinea incur direct expenditures which may be classified as aid to a developing country. These outlays, however, are shown under the same functional heading in the Budget Statements as similar outlays made within Australia. Supplementary information on the functional allocation of these outlays is available in the Bureau's publication *Public Authority Finance - Authorities of the Australian Government,* 1973-74. The Structure of the Functional Classification The major functional headings are shown in the summary table in Statement No. 3. Brief descriptions of the contents of each function are given below. These descriptions are intended to convey the scope of the outlays included under each function rather than to be a detailed listing of the content of each category. Further detail on each function is provided in the discussion in Statement No. 3. Historical data for the period 1964-65 to 1973-74 are given in summary form in Statement No. 6. Some changes have been made in the functional headings and their contents as shown in Statements No. 4 and 8 in the Budget Speech 1973-74. The various outlays on 'Immigration' have been allocated to appropriate functions including the renamed 'Labour and Employment' function (previously 'Employment Conditions'). Reconsideration of the previous treatment was made necessary by the administrative re-arrangements announced by the Government in June 1974. Water supply and sewerage undertakings in the Territories have been classified as business undertakings, in accordance with national accounting conventions. These changes are in line with international practice. From an examination of the classification structure set out in the Budget Statements it will be evident that the functional classification is at this stage relatively aggregative in nature. It has not, for example, been possible on the whole to dissect the administrative outlays of departments and to allocate them over the particular sub-categories shown under each functional heading. Under each functional heading in the classification, outlays have been grouped together into readily identifiable expenditure blocks. These expenditure blocks do not, as a rule, purport to represent detailed purpose-oriented sub-functions or programs; rather, they are meant as recognisable and meaningful groupings which readily lend themselves to discussion and analysis. Nevertheless, the main outlay blocks are decidedly more purpose-oriented than was the case with the categories of expenditure identified under the conventional classification used in the past. Given the need to produce a continuing and up-to-date record of actual monthly outlays and receipts which is consistent with the overall estimates embodied in the Budget Speech and documents, it has been necessary to work largely within existing central accounting records. These records are, at present, built around the Appropriation Acts, which are the legal authority for expenditure rather than detailed costing documents. The figures presented have, therefore, been derived essentially by reclassifying appropriation data supplemented, where necessary, by a limited number of sub-costings of substantial appropriation items which cover several functions. The problems of using existing accounting records for the purposes of the functional classification were magnified by the major changes to departmental administrative arrangements which were announced in December 1972 and June 1974. These changes have made it difficult to produce a strictly consistent set of outlay aggregates for the periods covered in the Budget Statements. Where possible, the more important discontinuities have been eliminated by the sub-costing and regrouping of appropriation data, but it has not been practicable to eliminate all inconsistencies to produce strict comparability of detailed estimates. This should be borne in mind when examining the tables set out in Statement No. 3 and particularly Statement No. 6. It should also be noted that the functional categories do not necessarily correspond with appropriation or departmental structures. Furthermore, some outlay and receipt figures are netted in arriving at aggregates. Expenditure votes and revenue heads under the control of a particular department may, therefore, be classified under more than one functional heading and it will not always be possible to identify individual appropriation items in the Statements. The introduction of the functional classification does not, however, alter the structure of the appropriations or the summaries presented with the Appropriation Bills, such as the document *Estimates of Receipts and Summary of Estimated Expenditure.* Although the basic aim of a functional classification scheme is to reveal the broad purposes for which government outlays are undertaken, it is important to note that such a classification cannot always be unambiguously applied. Particular items will often serve two or more distinct functions. Military colleges, for example, may be said to serve both a defence and an education purpose. The application of a functional classification scheme, however, requires that outlays be classified to the function which it is considered primarily to serve. In the example above, the primary function is considered to be defence. This is also in line with United Nations recommendations. As in any single classification system, it is not possible to focus at one and the same time on every outlay characteristic that may be of interest to the Government or the public. Supplementary information on particular aspects of expenditure is therefore provided in other documents; for example, details of wage and salary estimates are shown in the document *Estimates of Receipts and Summary of Estimated Expenditure* and a separate White Paper is provided on *Payments to or for the States and Local Government Authorities.* Other supplementary documents or statements may in future years be provided in order to focus on outlays related to particular policies or activities. {:#subdebate-71-0} #### The Implications of Adopting National Accounting Conventions As indicated earlier in this Appendix, the use of definitions of budget outlays and receipts based on national accounting conventions places budget data on a basis which is conceptually consistent with national accounting information published by the Bureau of Statistics and can more easily be related to trends in the public sector as a whole and developments in the economy reflected in that information. The principles underlying the national accounting presentation of budget data are set out in the Appendix to the Supplement to the Treasury Information Bulletin entitled *National Accounting Estimates of Receipts and Expenditure of Australian Government Authorities,* September 1974. Concurrent with the introduction of the functional classification in 1973-74, some changes were made to the previous national accounting definitions of outlays, receipts, the deficit, and their components used in the Budget Statements. The more significant of these changes were: {: type="a" start="a"} 0. Net advances to the Australian Wheat Board are treated as outlay items, rather than financing transactions as in the past. This brings the classification of these short-term advances into line with that accorded to other advances from the budget; 1. purchases of land and existing buildings (including inter-departmental transfers for which a financial adjustment is made) are now treated as outlays rather than offsets to the proceeds from the sale of these assets under a receipts heading. This change permits gross outlays on these assets to be shown under the appropriate functional headings. Other conceptual changes in line with the principles set out in the publication *A System of National Accounts* were also introduced. These changes relate mainly to the treatment of rents and business enterprise transactions and are indicated in the Supplement to the Treasury Information Bulletin issued concurrently with the Budget documents. Overall, they do not have a very significant effect on the figures shown for total receipts and total outlays. The adoption of national accounting conventions implies that the receipts and outlay figures shown in the Statements attached to the Budget Speech relate, for the most part, to the net transactions of the budget sector with the rest of the economy. Some important characteristics of the national accounting treatment shown in the Statements are as follows: {: type="a" start="a"} 0. The transactions of various Funds forming the Public Account (the Consolidated Revenue Fund, Trust Fund and Loan Fund) are consolidated and inter-fund transfers are eliminated. For example, payments to the Aboriginal Advancement Trust Account are not shown as part of outlays; rather, the expenditure from that Trust Account is included. The aim is essentially to record the transactions between the budget sector and the rest of the economy. Allowance is, however, made for adjustments between functions arising from the transfer of existing assets where financial adjustments for these transfers are recorded; 1. receipts derived from activities which are essentially of a governmental nature, involving regulation and compulsory payment, are normally treated as revenue items. This applies in particular to industry charges and levies, broadcasting and television licence fees, and fees and fines imposed by the courts. Other recoveries and repayments are normally offset against the relevant outlays to arrive at net outlay figures. For example, repayments of principal on advances to other authorities are offset against the corresponding advances under the same outlay heading. Bringing together the relevant outlays and recoveries or repayments makes it possible to see more readily the extent of financial resources which are directed through the budget to a particular activity. Taxes, compulsory charges, licence fees and the like are not regarded as being related to particular outlays but rather as being of a general revenue nature; 2. the operating revenues of activities which are carried out as business-type enterprises are shown net of operating expenses as receipts items and hence do not appear in the outlay tables. The current operations of enterprises are thus reflected in the Budget Statements to the extent that they contribute to general budget revenues; 3. finally, certain transactions which are netted in published totals of the receipts and payments of the Public Account are shown in gross form. The more important of these are interest on loans raised by the Australian Government for State works programs and for the Australian National Airlines Commission and Qantas Airways Limited. Interest paid on these loans is included under the outlay heading 'Public Debt Interest', while interest received on advances made to the relevant authorities is included as a receipts item. This has the effect of making the coverage of interest in the Statements the same as the coverage of the debt to which it relates. {:#subdebate-71-1} #### Description of Functions The following notes describe briefly the scope of the net outlays encompassed under each functional heading. {: type="1" start="1"} 0. *Defence* Outlays on military defence, including outlays to keep the armed services in a state of readiness. Includes outlays on central administration and on research in connection with activities carried out for defence purposes; outlays on military construction and equipment, inspection, transport and storage; all outlays on recruiting, training, equipping and housing the armed forces, and on medical care and other services for them; outlays on military colleges; expenditure for the provision of quarters for families of military personnel; outlays on pensions and other payments for military personnel under the Defence Forces Retirement and Death Benefit Scheme; outlays on civil defence; outlays on foreign military aid and contributions to international military organisations and alliances. {: type="1" start="2"} 0. *Education* Outlays on the provision, management and support of educational services from preschool level through to higher school certificate level, trade and technical courses, courses in music, fine arts, etc., and of university and other higher education. Includes outlays relating to the provision of scholarships and allowances to students at all levels; special educational programs designed specifically for the benefit of persons of Aboriginal descent, for migrants and for handicapped children; expenditure on non- vocational adult education courses, school bus services, and general administration, regulation and research activities related to education. {: type="1" start="3"} 0. *Health* Outlays on facilities or services for the prevention and treatment of human illness. Includes outlays related to the prevention of diseases, such as chest X-ray campaigns, immunisation and vaccination programs, regulation of standards of sanitation, etc. ; outlays concerned with the provision of hospital and clinical services, including treatment and care of those suffering from psychiatric disorders, infectious diseases, etc., and expenditure on nursing schools associated with hospitals. Also includes the payment of hospital, nursing home, medical and pharmaceutical benefits which are designed to cover all or part of the costs of hospitalization and medical treatment and provision of drugs and appliances; outlays on the provision of dental services, school medical services, ambulance services; special programs for the treatment and care of specific groups, such as persons of Aboriginal descent, the aged, former members of the armed forces and their dependants; community health centres, centres for the treatment of drug addicts, and domiciliary care services; general administration, regulation and research related to health matters. {: type="1" start="4"} 0. *Social Security and Welfare* Provision of pensions and allowances and other benefits to persons who, because of age, physical or mental disability, domestic circumstances or other reasons, are unable or not expected to earn a sufficient livelihood for themselves and their dependants. Includes the provision of benefits such as unemployment benefits, age and repatriation pensions, accident and sickness benefits, other benefits to compensate for loss of income and unemployment relief schemes. Provision of financial assistance towards the expenses associated with the bearing and raising of children, marriage guidance and child care facilities, other social security benefits, child welfare services and institutions, homes for and care of the aged and disabled and welfare programs to meet specific needs of disadvantaged groups. {: type="1" start="5"} 0. *Housing* Outlays on the provision of dwellings for sale or rental, and mortgage finance for purchase or construction of dwellings, other financial assistance aimed at facilitating the purchase or construction of dwellings or home ownership. General administration, regulation and promotion of standards, and research in the field of housing. {: type="1" start="6"} 0. *Urban and Regional Development nec and the Environment* Urban and Regional Development nec: Outlays on general promotion and assistance for urban and regional planning and development. Includes outlays on the development of new cities or suburbs where it is not possible to distinguish expenditure as specifically for housing, roads, sewerage or other purposes, or it is not appropriate to classify the expenditure to other categories (such as in the case of major urban sub-division or renewal outlays, including the purchase of land for such purposes). Outlays on the treatment and disposal of sewage, refuse collection and disposal. Administrative costs of departments and agencies engaged in urban and regional planning and development and miscellaneous outlays on the provision of community amenities. Protection of Environment : Outlays on water quality control, air pollution and monitoring and other outlays related to pollution prevention and protection of the environment including research, planning and investigation. {: type="1" start="7"} 0. *Culture and Recreation* Outlays related to the support of performing and creative arts; support of organisations concerned with sporting and other leisure-time activities, and provision of facilities serving purposes primarily related to these activities, such as swimming pools, community centres, athletic fields, etc; contributions to youth and social organisations; outlays on the protection and preservation of historic sites and buildings, parks and wildlife reserves, and other elements of the national estate; outlays on the provision and operation of government radio and television broadcasting services. {: type="1" start="8"} 0. *Economic Services* This category covers regulation of, and assistance provided to, the private sector, direct government participation in economic activity and provision of economic infrastructure. {: type="A" start="A"} 0. *Transport and Communication.* Outlays concerned with postal services, and domestic and overseas telecommunications; outlays on construction, maintenance, promotion, administration and research relating to the various modes of land, sea and air transport, including urban transportation systems and pipelines for petroleum and gas transport. (Road traffic control services are shown under the category 'Law, Order and Public Safety'.) 1. *Water Supply and Electricity.* Outlays on construction and other assistance, regulation and research in connection with the production, transmission and distribution of electricity; and on the conservation, collection, purification and distribution of water primarily for domestic and industrial consumption. 2. *Industry Assistance and Development.* Direct assistance to primary, secondary or service enterprises in forms such as bounties, subsidies, export incentives, advances from the Budget and other transfers including payments to ensure guaranteed prices for commodities or to maintain the prices of commodities below their normal market price; support of agricultural and other industrial research and development and of promotional activities including export promotion; outlays on the management of timber and fishery resources; provision of veterinary, extension and other services to agriculture; land clearing, reclamation and settlement activities; outlays on programs of rural debt reconstruction and farm rehabilitation; investigation, measurement, development and management of water resources for irrigation and pastoral purposes and flood mitigation; assistance and encouragement of mineral exploration; geological surveys; development of tourist facilities and tourist promotion; administration, promotion, regulation and research, directly associated with specific primary, secondary or service industries. 3. *Labour and Employment.* Outlays related to the regulation of working conditions, the prevention and settlement of industrial disputes and the enforcement of industrial awards and agreements; programs designed to facilitate changes of occupation by persons displaced by redundancy, occupational training schemes for adults including assistance to enter or re-enter the work-force, provision of labour exchange facilities; outlays directly related to the assisted passage migration scheme; general administration, regulation and research in the field of labour affairs. 4. *Other Economic Services.* Outlays related to regulation of monopolies and restrictive trade practices, price control and justification, regulation of the tariff, other forms of business regulation; outlays on patents and trade marks administration, outlays on meteorological services and other technical services not allocable to specific kinds of industry; outlays on general administration in the area of economic and commercial affairs not allocable to other outlay categories within the 'Economic Services' function. {: type="1" start="9"} 0. *General Public Services* This category covers outlays on a number of general public services and activities concerned with the organisation and operation of government. {: type="A" start="A"} 0. *Legislative Activities.* Outlays of the legislative and executive bodies of government, including parliamentary committees and the operation of the Governor-General's establishments; outlays related to the conduct of elections and maintenance of registers of voters. 1. *Law, Order and Public Safety.* Outlays on law courts (other than those concerned with industrial relations) and bodies concerned with the administration of the legal system and preparation and execution of law court action; provision of legal aid; registration of legal titles to property; outlays in respect of prisons and other places of detention and correction, and probation services; police services, including traffic control; fire protection and other public safety promotion or services; general administration and research related to these activities. 2. *Foreign Affairs and Overseas Aid.* Outlays of departments and agencies charged primarily with the handling of foreign relations; administration and other expenditure relating to external territories; and outlays on foreign economic aid and contributions to international bodies other than military alliances and organisations. 3. *General and Scientific Research.* Contributions for the promotion of, and outlays on, basic and general research in the biological, physical and social sciences, which cannot readily be classified to other outlay categories or linked with the provision or promotion of a particular service or activity. 4. *Administrative Services.* Outlays on the collection of taxes, raising public loans, managing public debt, and controlling the disbursement and audit of public funds. Outlays on general services for the government as a whole, such as statistical services, the purchase and operation of government buildings and equipment (including the construction, repair and maintenance of general purpose buildings), office cleaning, personnel and other administration. General administrative expenses of departments covering a variety of government activities and which cannot be readily apportioned over relevant functions are also included under this heading. {: type="1" start="1"} 0. *Outlays Not Allocated to Function* 5. *Payments to or for the States and to Local Government Authorities nec and Natural Disaster Relief.* General purpose grants and advances to State and other local government authorities which may be spent at the recipient's discretion and grants not classifiable to specific functions. This category includes payments to assist the States to meet debt charges. Payments to States and direct assistance for the relief of victims of drought, flood, fire and other natural disasters, and for the restoration of community services and facilities. {: type="A" start="B"} 0. *Public Debt Interest.* Net interest payments made from the budget sector to other sectors, including interest payments on government securities, or under credit arrangements with other countries. Interest received from Government investments in Australian Government securities is offset against gross interest payments. {: .page-start } page 1425 {:#debate-72} ### APPROPRIATION BILL (No. 2) 1974-75 Message from the Governor-General recommending appropriation for proposed expenditure announced. Bill presented by **Mr Crean,** and read a first time. {:#subdebate-72-0} #### Second Reading {: #subdebate-72-0-s0 .speaker-JAG} ##### Mr CREAN:
Treasurer · Melbourne Ports · ALP >That the Bill be now read a second time. This speech is blessedly short. This Bill contains details of proposed appropriations of the Consolidated Revenue Fund in 1974-75 totalling $1,670,805,000 for expenditure on: The construction of public works and buildings; the acquisition of sites and buildings; advances and loans; items of plant and equipment which are clearly definable as capital expenditure; grants to the States under section 96 of the Constitution; and new policies not authorised by special legislation. Included in the above total is an amount of $75m as an advance to the Treasurer for the purposes set out in the Bill. The proposed expenditures in this Bill were dealt with as appropriate in my Budget Speech. I commend the Bill to honourable members. Debate (on motion by **Dr Edwards)** adjourned. {: .page-start } page 1425 {:#debate-73} ### BUDGET 1974-75 **Mr CREAN** (Melbourne PortsTreasurer)For the information of honourable members, I present the following papers in connection with the Budget for 1974-75: >Estimates of Receipts and Summary of Estimated Expenditure for the year ending 30 June 1975. > >Payments to or for the States and Local Government Authorities 1974-75. {:#subdebate-73-0} #### National Income and Expenditure 1973-74 Government Securities on Issue at 30 June 1 974. {:#subdebate-73-1} #### Income Tax Statistics Advance to the Treasurer. Statement of Heads of Expenditure and the amounts charged thereto pursuant to section 36a of the Audit Act 1901-1973. The Treasurer's Statement of Receipts and Expenditure for the year ended 30 June 1974. {:#subdebate-73-2} #### Australia's External Aid 1974-75 {:#subdebate-73-3} #### Civil Works Program 1 974-75 {:#subdebate-73-4} #### Urban and Regional Development 1974-75 Ordered that the papers be printed. {: .page-start } page 1425 {:#debate-74} ### QUESTION {:#subdebate-74-0} #### TAXATION REVIEW COMMITTEE **Mr CREAN** (Melbourne PortsTreasurer)For the information of honourable members, I present the preliminary report dated 1 June 1974 from the Taxation Review Committee. I seek leave to make a short statement in connection with that report. {: #subdebate-74-0-s0 .speaker-10000} ##### Mr SPEAKER: -Is leave granted? There being no objection, leave is granted. {: #subdebate-74-0-s1 .speaker-JAG} ##### Mr CREAN:
ALP -- The preliminary report was prepared by the Committee at my request in order that a broad-brush indication of the Committee 's views on some of the larger taxation issues could be available prior to the shaping of the 1974-75 Budget. In tabling it now I express the hope that the report will stimulate public discussion on the many major taxation isssues with which it deals. In that connection I mention that between now and the end of this year the Treasury will be publishing its submisssions to the Taxation Review Committee and that the full report of the Committee is expected to be published around the end of 1974. In the light of detailed examination of the Committee 's preliminary report and, when it is received, the full report, and of the public discussion which will be stimulated by them, the Government will thereafter review its policies towards the taxation system as a whole. In tabling the preliminary report I express my appreciation of the quick and effective way in which the Committee, under the chairmanship of **Mr Justice** Asprey, responded to my request for a preliminary report. {: .page-start } page 1425 {:#debate-75} ### TARIFF PROPOSALS {: #debate-75-s0 .speaker-1V4} ##### Dr J F CAIRNS:
Minister for Overseas Trade · LALOR, VICTORIA · ALP -- I move: {:#subdebate-75-0} #### Excise Tariff Proposals No. 2 ( 1974) {:#subdebate-75-1} #### Customs Tariff Proposals No. 12(1974) Excise Tariff Proposals No. 2 (1974) and Customs Tariff Proposals No. 12 (1974) which I have just tabled introduce the tariff changes on brandy foreshadowed by my colleague the Treasurer **(Mr Crean)** in his Budget Speech earlier this evening. These changes will be effective on and after eight o'clock this evening. The increased duties will add a little more than 12c to the duty component in a bottle of brandy. I commend the proposals. Debate (on motion by **Mr Adermann)** adjourned. {: .page-start } page 1425 {:#debate-76} ### LIQUEFIED GAS (ROAD VEHICLE USE) TAX BILL 1974 Bill presented by **Dr J.** F. Cairns, and read a first time. {:#subdebate-76-0} #### Second Reading {: #subdebate-76-0-s0 .speaker-1V4} ##### Dr J F CAIRNS:
Minister for Overseas Trade · LALOR, VICTORIA · ALP -- I move: >That the Bill be now read a second time. The Bill now before the House imposes a tax of 2c per litre on liquefied gas used for propelling road vehicles. The introduction of this tax was foreshadowed in the Treasurer's Budget Speech. The tax imposed by this Bill applies only to liquefied gas used in the propulsion of road vehicles. It does not in any way affect the bulk of liquefied gas which is used in the community for domestic and industrial heating, cooking and various other purposes. The use of liquefied gas in road vehicles has been increasing at a significant rate. Users of liquefied gas for vehicle propulsion, however, do not, at present, contribute to Government revenues, much of which is expended on road construction and maintenance. This tax will remedy this anomaly. The rate of tax proposed- 2c per litre- is almost exactly 40 per cent of the current rate of excise duty on petrol and is considered to be a rate which will minimise the erosion of petrol excise whilst not unduly inhibiting expansion of the use of gas for propelling road vehicles. The Government is aware of the high cost of establishing supply and distribution facilities for liquefied gas and of the need to be able to plan such expansion with confidence. For this reason the Government has decided that, for the next S years, the rate of tax payable on liquefied gas used in road vehicles, will be increased only on 50 per cent of any increases of petrol excise that may occur in that period. Tax will be payable on liquefied gas used in propelling a road vehicle by the person owning the gas immediately before such use. It will be paid monthly by users on the basis of returns of use submitted to Collectors of Customs. The Bill proposes that the tax will operate on and from a date to be proclaimed. A summary of the clauses of the Bill is being circulated to honourable members. I commend the Bill. Debate (on motion by **Mr Adermann)** adjourned. {: .page-start } page 1426 {:#debate-77} ### LIQUEFIED GAS (ROAD VEHICLE USE) TAX COLLECTION BILL 1974 Bill presented by **Dr J.** F. Cairns, and read a first time. {:#subdebate-77-0} #### Second Reading {: #subdebate-77-0-s0 .speaker-1V4} ##### Dr J F CAIRNS:
Minister for Overseas Trade · LALOR, VICTORIA · ALP -I move: >That the Bill be now read a second time. The Bill now before the House is complementary to the Liquefied Gas (Road Vehicle Use) Tax Bill 1974 which has just been introduced. The Liquefied Gas (Road Vehicle Use) Tax Collection Bill 1974 provides the administrative machinery which will become necessary for the collection of the tax on liquefied gas used in propelling road vehicles when the tax comes into effect. Tax will be payable on liquefied gas used in propelling a road vehicle by the person owning the gas immediately before such use. It will be paid monthly by users on the basis of returns of use submitted to Collectors of Customs. I commend the Bill. Debate (on motion by **Mr Adermann)** adjourned. {: .page-start } page 1426 {:#debate-78} ### POST AND TELEGRAPH RATES BILL (No. 2) 1974 Bill- by leave- presented by **Mr Lionel** Bowen, and read a first time. {:#subdebate-78-0} #### Second Reading {: #subdebate-78-0-s0 .speaker-ZE4} ##### Mr LIONEL BOWEN:
KingsfordSmithSpecial Minister of State · ALP -- I move: >That the Bill be now read a second time. **Mr Deputy Speaker,** the Treasurer **(Mr Crean)** referred in his Budget Speech to the need for higher Post Office charges than were previously proposed because of the Opposition's action in the Senate in July in deferring the increases which were to apply from 1 August, after the Opposition in this House voted for the Bill. The deferment of those increases to 1 October would mean that Post Office receipts in 1974-75 would be about $30m less than was anticipated from that source. As far back as the Premiers Conference of 7 June it was known publicly that the Post Office appropriation in the Budget would be held at last year's level of $385m. The Postmaster-General **(Senator Bishop)** in the debate in the Senate stressed that there would be no increase in that allocation. The effect of deferment has to be either higher charges to cover the shortfall or a cut in the Post Office's capital investment program. The Opposition's action in the Senate has been strongly condemned from many quarters. The Prime Minister **(Mr Whitlam)** at his Press conference on 30 July termed the deferment grossly irresponsible. He said: >It seems the grossest irresponsibility for an Opposition which, when it was in Government knew this would have to be done, which has now had that knowledge re-inforced by **Sir James** Vernon's Royal Commission, now to say it will reject these charges. The daily newspapers and the financial Press condemned the Opposition's action in equally strong terms. The 'Age' editorial of 1 August said: >Higher postal charges are not so much a pan of the Government's anti-inflationary program as a first step towards making the Post Office commercially viable . . . Significantly, the Opposition did not oppose the increased postal charges in the House of Representatives. Their rejection in the Senate must be seen as a tactical manoeuvre based on opportunism rather than a valid objection based on reason or principle. One way or another, the public will have to pay. On 3 1 July the editor of the 'Australian Financial Review', under the heading 'B. M. Snedden's Seven Cent Heroics', wrote: >Every so often opportunism can be dressed up to pass muster as considered rational policy. However, **Mr Snedden** was the man who campaigned on the necessity of pruning the expenditure side of the Commonwealth Budget. It is almost totally inconsistent for him to espouse this and at the same time scheme to prevent the Government increasing postal charges. The Government is not prepared to vary its previous decision and allocate more from the Budget to the Post Office because this could only be at the expense of our priority programmes in the fields of education, welfare and health. It is generally accepted that the Post Office should finance a significant proportion of postal and telecommunications expansion. (Quorum formed) The report of the Vernon Commission recommends that SO per cent of fixed asset expenditure should be financed from internal sources- profits and provisions for depreciation and long service leave. This enables the Post Office to meet demand for service at a higher level than would be possible if finances were restricted to borrowings available through the Budget. If borrowings through the Budget were increased, the percentage of telecommunications capital investment which is internally financed would fall well below 50 per cent. After close study, the Government has also decided that it would not be appropriate to cut Post Office capital investment by some further $30m and let existing telephone applicants increase by 40,000 to 163,000. That would mean a telecommunications engineering construction program 6 per cent below the 1973-74 level of effort. It would obviously require substantial retrenchments in the Post Office's 18,000 capital works staff and in the telecommunications manufacturing industry staff of 20,000 where skilled resources have been built up over many years. In considering how some $30m should be raised from extra higher charges in 1974-75, the Government considered that the postal service with its huge losses must bear a significant part. The basic postage will therefore be increased to 10c with other increases in associated charges which I will outline shortly. On the telephone side, it seemed completely inequitable for the residential subscriber to pay more directly because of the Opposition's action and it was therefore decided that the remaining shortfall should be borne by business subscribers. Business telephone rentals will be increased to $85 and there are also some further increases in telex call charges and rentals, for installation and removal fees for miscellaneous telephone facilities and for telegraphic code addresses. Otherwise the increases are identical with those included in the previous Bills. Full details of all the charges are given in the schedule circulated to honourable members but the major items are: Telephone service connection fees are being increased from $60 to $80 for new applicants where new plant is necessary and from $30 to $40 where an existing subscriber moves to another address and new plant is required, to raise $6m in 1974-75. Government and business rentals will increase by $30 to $85, instead of $75 previously proposed, and residential and other rentals by $10 to $65, to raise $58m in 1974-75. The local call fee will rise from 4.75c to 6c, but this will not be reflected directly into trunk call charges. Day time calls will rise by between 3.5 per cent and 5.3 per cent only, except for those over 645 kilometres where the increase is 26 per cent. Night rates are being reduced by 3 per cent to 40 per cent, with the shortest distance calls up to 50 kilometres costing only 6c- that is the local call fee- for each three minutes. Variations in call charges will raise $3 lm in 1974-75. The basic postage for standard and nonstandard postal articles will be 10c and 11c, instead of 9c and 10c previously proposed. These higher increases will be reflected into charges for heavier weight items, bulk presorted mail, Category 'C registered publications, householder mail, overseas mail, airmail and priority paid mail. Variations in all postal charges will raise $43m in 1 974-75. The total extra receipts in 1974-75 from all increases is $146m. This is the same amount which would have been raised if the deferred proposals had applied from 1 August. A substantial amount of justification for the individual variations was given when these measures were first announced and it is not necessary to repeat it because it is readily available. In addition, more complete financial information is available in the annual Post Office White Paper which has been presented. It must be realised by the Opposition that the Government is determined to ensure that the costs of the Post Office are met by the users of the services. This is in line with the recommendations of the Vernon Commission, which saw the need for the Post Office to operate in a similar manner to other Government undertakings. Higher borrowings from the Treasury, year after year, are not the answer to the cost increases faced by the Post Office, and this Bill endeavours to correct the situation that has been accentuated by the Opposition's recent actions. I emphasise that but for these recent actions the basic postage paid by the Australian people would be 9c instead of the 10c now necessary; the telephone rental on business and government services would be $75 instead of the $85 they must now pay. The price of the Opposition's previous irresponsible decision is lc on every letter and $ 10 on every business telephone service. The people of Australia and the business community in particular should remember that. The date of effect of the variations to charges in the Bill is 1 October. The Opposition has had some 3 months to study them. It can consider them in the context of the Budget. It can now see the implications of its previous decision. What is needed is expeditious action to pass this legislation to avoid the Post Office being affected yet again. The purpose of this Bill is to amend the Post and Telegraph Rates Act in respect of postal and telegraph charges. Another Bill will amend the Post and Telegraph Act and associated regulations. Certain miscellaneous charges will be adjusted by administrative action. I commend the Bill to honourable members and seek leave to have incorporated in Hansard a table relating to the adjustment of charges for postal and telecommunication services. {: #subdebate-78-0-s1 .speaker-KCU} ##### Mr DEPUTY SPEAKER (Mr Drury:
RYAN, QUEENSLAND -Is leave granted? There being no objection, leave is granted. ADJUSTMENTS OF CHARGES FOR POSTAL AND TELECOMMUNICATION SERVICES 1974 telecommunication services Debate (on motion by **Mr Ellicott)** adjourned. {: .page-start } page 1437 {:#debate-79} ### POST OFFICE PROSPECTS AND CAPITAL PROGRAM 1974-75 {: #debate-79-s0 .speaker-ZE4} ##### Mr LIONEL BOWEN:
KingsfordSmithSpecial Minister of State · ALP -- by leave- Pursuant to section 96m of the Post and Telegraph Act 1901-1973, 1 present for the information of the honourable members a white paper entitled 'Post office prospects and capital programme 1974-75'. {: .page-start } page 1437 {:#debate-80} ### POST AND TELEGRAPH BILL (No. 2) 1974 Bill- by leave- presented by **Mr Lionel** Bowen, and read a first time. {:#subdebate-80-0} #### Second Reading {: #subdebate-80-0-s0 .speaker-ZE4} ##### Mr LIONEL BOWEN:
KingsfordSmithSpecial Minister of State · ALP -- I move: This Bill is complementary to the amendments to the Post and Telegraph Rates Act 1902-1973 which I have just introduced. In order to implement the changes of which I have spoken in conjunction with the Post and Telegraph Rates Act amendments, it is necessary to make certain amendments to the Post and Telegraph Act and to the postal regulations, the telephone regulations, the telegraph regulations and the radiotelephone exchange service regulations. As mentioned previously, this Bill also makes changes to the Post and Telegraph Act which are necessary to permit the introduction of a Post Office courier service. Initially, the courier service, to cater for the special need for a messenger service for urgent articles, will be provided in Melbourne, Sydney and Canberra, with subsequent extension to the other capital cities. The present privately operated ventures meet a substantial and growing customer need but are close to the traditional areas of postal operations. It is, therefore, appropriate for the Post Office to provide a courier service and it is expected that this will be a profitable operation. I commend the Bill to honourable members. Debate (on motion by **Mr Ellicott)** adjourned. {: .page-start } page 1437 {:#debate-81} ### BROADCASTING AND TELEVISION BILL 1974 Bill- by leave- presented by **Mr Morrison,** and read a first time. {:#subdebate-81-0} #### Second Reading {: #subdebate-81-0-s0 .speaker-009DB} ##### Mr MORRISON:
Minister for Science · St George · ALP -- I move: The honourable the Treasurer **(Mr Crean)** referred in his Budget Speech to the Government's decision to abolish broadcast listeners' and television viewers' licences. This BUI contains the necessary amendments to the Broadcasting and Television Act 1942-1973. This is an important decision which will place Australia with Canada as the only two major countries whose governments provide a national service without charging radio and television set owners an annual licence fee. It will free close to 3.5 million Australians, including 500,000 pensioners, of any future liability for licence fees which range up to $26.50 per annum. The Government believes that the national broadcasting and television service should not be regarded as resembling a business undertaking in which receipts are related to expenditure. The national service provides an information, educational, cultural and entertainment service to the community. The Government believes that all people should have equal access to such services and it is, therefore, proper for the costs of these services to be a charge on the community as a whole through taxation. Licence fees have been a means of requiring radio and television set owners to make a contribution towards expenditure on the national broadcasting and television service. The contribution has been substantial. When licence fees were increased in 1968 and 1971 by the Liberal-Country Party Government, the result was that about 75 per cent of expenditure was recovered through fees. This practice has resulted in annual fees of $26.50 for a combined broadcasting and television licence; $19 for a television licence; and $8 or $4.25 for a broadcasting licence, depending on the zone. If this practice had been followed today, a combined licence fee of at least $40 would be appropriate, an increase of about 50 per cent, with a fee of about $50 for colour television sets. Not only have the licence fees been substantial, but they have represented a poll tax applied uniformly throughout the community. Its burden is, therefore, relatively heavier on lower income earners than on the more affluent. This regressive aspect is accentuated by the requirement of only one licence for all receivers in any one dwellingthe affluent are more likely to be multiple set owners. Paying for the service from taxation collections which reflect the capacity to pay principle is more equitable. The licence fee has also become a relatively expensive tax to collect. The cost of administering the scheme in 1973-74 was $3.4m, representing almost 5 per cent of the total licence revenue, compared with a cost equal to about 1 per cent for income tax. Payment for the national service through the taxation system rather than by a special tax is, therefore, much more efficient. A considerable proportion of the expenses of administering the scheme was incurred in policing the licence provisions of the Act. Despite the active work of some 80 licence inspectors, evasion has been a substantial problem. It has been estimated that revenue of about $llm annually is lost through evasion, and of course evasions increase as fees rise. Last year, 23,000 people were prosecuted for not having licences. I wish to express appreciation of the staff of the Postmaster-General's Department, past and present, who have been responsible for establishing, operating and policing the licensing system. Often the unpopularity of licences has been taken out on them personally by licensees and non-licensees, but they have gone about their work with commendable efficiency and good grace. The existing staff, numbering 247, are being advised that there will be no retrenchments and that they will be placed in other areas as vacancies arise and after any necessary retraining in departmental time and at departmental expense. There will be no refunds on current licences. However, in the case of licensees who have renewed, in advance, licences expiring after 17 September, a refund will be made as soon as practicable after this legislation is adopted. Any payments received subsequently for licences expiring after 1 7 September will also be returned to the payee. The abolition of the licensing system will cost the Government an estimated $50m in 1974-75 and $67m in a full year. This takes account of the saving in administrative costs. Refunds on unexpired portions of current licences would have cost the Government a further $30m in 1974-75 and made abolition too expensive to be contemplated. All licensees have escaped future payments and that should be a cause for considerable satisfaction. I commend the Bill to honourable members. Debate (on motion by **Mr Ellicott)** adjourned. {: .page-start } page 1438 {:#debate-82} ### ROADS GRANTS BILL 1974 Message received from the Senate intimating that it does not insist upon the amendments made by it and disagreed to by the House of Representatives; agreeing to the amendments made by the House in place thereof; and agreeing to the amendments made by the House to clause 3 of the Bill. {: .page-start } page 1438 {:#debate-83} ### NATIONAL ROADS BILL 1974 Message received from the Senate intimating that it does not insist upon the amendments made by it and disagreed to by the House of Representatives. {: .page-start } page 1438 {:#debate-84} ### ADJOURNMENT Sale of Pornographic Articles- Fuel Supplies in Country Areas-River Murray Waters: Pollution -Cities Commission- Defence Equipment- Imported Goods- Unemployment Motion (by **Mr Morrison)** proposed: >That the House do now adjourn. {: #debate-84-s0 .speaker-K5A} ##### Mr O'KEEFE:
Paterson -- I want to talk about an incident which happened here in Canberra recently on the occasion of a visit by some school children. I made arrangements for the fifth and six grade school children from St Joseph's School, East Maitland, to visit the Federal Capital. On 3 September, while they were here, they went to Red Hill and there they purchased at a store a number of articles entitled 'The Merry Monk with Fun Raising Action'. The instructions on the box containing the article that these children purchased were as follows: >Place figure on flat surface, press head down with finger and watch the action. By following these instructions a reproduction of a penis was projected from the monk's habit. One of these articles was on display in this position. Despite the fact that on the box containing the article it was stated quite clearly 'this article is not- ( 1 ) to be sold to a person under the age of 18 years; (2) to be demonstrated in public; (3) to be sold through the post as a mail order item or to a person who has not first had an opportunity to inspect it fully,' two of these were sold by women members of the staff at the store- one to an 1 1-year old boy and another to a 12-year old boy. While leaving the kiosk, Father Gahan, who was in charge of the boys, noticed them with the articles. Having observed these articles on display and consequently knowing their immoral nature, he confiscated them and returned to the kiosk, accompanied by the boys, so that they could identify the persons who were responsible for the sale. He spoke to the woman in charge, who was also one of the persons identified by the boys, about the sale of these articles to minors. She admitted selling them and offered the excuse that she told the boss that he should not have purchased them in the first place. She offered to refund the money, $1.99; but Father Grahan refused at that stage because, feeling as strongly as he did about the spread of pornographic material, especially the easy accessibility that minors have to this material, he considered that the matter needed to be taken further. Therefore, he requested the name and telephone number of the owner and the names of those involved in the sale, with the intention of taking this matter up with the Australian Capital Territory Police for the purpose of prosecution. On leaving Red Hill he went to police headquarters and reported the incident. He spoke to Inspector Mills who, whilst sympathetic towards his feelings on what had happened, felt that very little could be done because of the laxity of the law in the Australian Capital Territory regarding such material. Nevertheless, Father Gahan requested Constable Hibberd to investigate the matter and he requested an interview with the constable on the following day, Wednesday, 4 September, after 3 p.m. It was after this that he first contacted His Grace, the Archbishop of Canberra-Goulburn, to inform him of what had happened and what action had been taken. On Wednesday, 4 September, at approximately 4 p.m. he again visited police headquarters and spoke to Constable Hibberd. The constable handed Father Gahan an envelope containing $2 as a refund for one of the articles he had left with Inspector Mills the previous day. The other article is still in Father Gahan 's possession. The constable went on to tell Father Gahan that he had spoken to the owner of the kiosk who had already removed the demonstration model from the showcase and had locked the display case containing the articles in question. His excuse for the sale to the children in question was that the staff were new to the job. The impression given by the constable was that the matter was now closed. Again Father Gahan was not prepared to accept this and repeatedly asked what further steps would be taken. The result was that the constable excused himself to refer the matter to another inspector. A short time later Inspector Broomby met Father Gahan, who repeated the details to the inspector. Like the previous inspector, Inspector Broomby felt that little could be done. However, Father Gahan persisted with the request that further action be instigated. Inspector Broomby agreed with Father Gahan that the article was obscene and that it had been sold to minors; that is, persons under 16 years of age. His attitude was still that nothing could be done because of the present law and he further pointed out that before the police could proceed with a prosecution in the area of pornography a magistrate's approval had to be obtained to seize the material in question. This material would then have to be submitted to that magistrate for his assessment of its pornographic content. If he agreed that the material was pornographic and prosecution was warranted it would be necessary to submit the case to the Attorney-General's Department for its approval or rejection before proceeding with prosecution. It would seem that this is where the crux of the problem lies. Again Father Gahan persisted by asking what would be the inspector's attitude if the object had been presented as a policeman or the Prime Minister. The inspector agreed with the validity of Father Gahan 's point of view and went even further to agree with his statement that as a Christian leader in the community if he did not take a stand on such matters as this, how could he expect other citizens to take a stand. In a word, the existence of the present approach in law has come about because of the people's apathy. In the whole of this matter Father Gahan continued to stress the one aspect of minors being exposed to and able to purchase pornographic or obscene material. He pressed this approach further with the inspector by stating that further action would be taken by him. Finally, having checked the statutes of the law, the inspector informed Father Gahan that the articles purchased would be regarded as pornographic and obscene and that the children in question were minors under the law. He then decided to request a full statement from the constable who first investigated the matter and also to prepare a report on it himself, both of which reports he would submit to the Commissioner for his decision on any further action. That is where the matter rested. Might I add that this pornographic material has come into this country from Hong Kong. If such items are on sale at a store here at Red Hill I venture to say that there would be hundreds of thousands of these merry monk items spread throughout the length and breadth of Australia. It is certainly a degrading insult to the priesthood- men who are involved in spreading Christianity in this country- to be defamed in such a manner. I think this matter should be taken further. It should be taken to the AttorneyGeneral. Young children in this country are being subjected to pornographic material of this nature which is coming from foreign countries such as Hong Kong. I think that something ought to be done about it and it should be stopped. I congratulate Father John Gahan of the East Maitland St Joseph's School for his action in this matter. He has gone to a lot of trouble. I hope his efforts will be rewarded. I trust that my speech tonight exposing this matter will receive consideration in the right quarters. This matter was featured on the national network's 'This Day Tonight' last Thursday night. It was brought to light by none other than Richard Carlton of the Aus.tralian Broadcasting Commission. I hope that the complaint made by Father John Gahan is investigated to the full and that pornographic material of this nature is prevented from entering Australia {: #debate-84-s1 .speaker-KIH} ##### Mr LUCOCK:
Lyne -- I wish to raise the matter of the supply of fuel, particularly to country areas. In the last 18 months or 2 years country areas have had a serious problem each time there has been an industrial dispute in the fuel industry. This has had a detrimental effect on many industries, not only in my electorate but in aU country areas. Only recently I heard something which was most disturbing, and that was that a man who owns a petrol station had additional tank capacity installed at his station to build up a reserve so that in the event of any industrial difficulties he would have sufficient fuel to carry on for some time. I Will not mention his name because of the danger of victimisation. As his station is on one of our main highways, it would be of tremendous advantage to him and to the travelling public if he had additional supplies. When the supplies arrived he said that he wanted a certain amount of petrol. He was told that he could receive only X gallons. He said that the amount was not sufficient for him, that he had additional tanks installed so that he could carry extra supplies. He was told by the driver that he would receive a certain amount and that was all, that if he did not want to take it, he may not get any supplies. Upon contacting the oil company he was informed that this was the situation, that the driver was one of the top union men and that, literally if the driver said that he would get only a certain amount of petrol, that was the situation. I think there are 2 points in this matter. Firstly, the refusal to supply extra petrol impinges upon the freedom of the individual- a man in business -to obtain the supplies he desires and needs. Secondly, it places the transport sector in a serious psition because if supplies can be held down to a certain level and if there is a strike the unions have a greater opportunity to hold the public at ransom. I remember not so long ago in this Parliament the late **Sir Wilfrid** Kent Hughes saying something to which more people in Australia ought to have given attention. The words of that distinguished gentleman were that if the left wing of the communist unions obtained control of the power union, the transport union and the supply union it could bring this country to its knees. With the industrial disputes in the supply and transport areas we have seen this almost happening. {: .speaker-JUS} ##### Mr McVeigh: -- Encouraged by the Government, too. {: .speaker-KIH} ##### Mr LUCOCK: -- As my friend, the honourable member for Darling Downs, has said, in many instances the disputes have been encouraged by the present Government. I think the situation I have outlined really needs looking at. It is said that the oil companies were using stand-over tactics. This situation was brought about by stand-over tactics by a union organiser. I really think the matter should be investigated. The Minister for Transport might be well advised to look at the situation so that in both the industrial field and the transport field country areas at least are not penalised any more as they have been over recent months. In more than one area in my own electorate industry was affected because it was not able to get distillate. The supply of fuel is important in any area but in country areas it is a great deal more important. I would suggest that the Minister look at the situation to find out the truth and do something to help country areas. {: #debate-84-s2 .speaker-KB8} ##### Mr GILES:
Angas -On 15 May 1973, on behalf of the right honourable member for Higgins **(Mr. Gorton)** I moved an amendment to the Cities Commission Bill to omit a clause and to substitute other words. The Minister for Urban and Regional Development **(Mr Uren)** accepted the amendment on behalf of the Government. The purpose of the amendment was to increase by two the number of persons on the Advisory Committee of the Cities Commission to allow the appointment of 2 persons with a specialised and expert knowledge of preservation and conservation of the environment. I was prompted to take an interest in this matter because of its importance to the State of South Australia and the towns I represent in that State downstream on the Murray River from AlburyWodonga, in relation to conservation, the various aspects of the ecology of the river, and pollution. It was important to put someone on that advisory committee to look after the possible pollution of the River Murray downstream from Albury-Wodonga. My audience tonight is not exactly great. I notice that my friend, the honourable member for Hunter **(Mr James)** is the sole backbencher present on the Government side. A latecomer has now entered the chamber. Of course, the Special Minister of State **(Mr Bowen)** has to be here. The importance of the action I took, to my electorate and indeed to the whole of South Australia, was that it was an attempt to ensure that in the future, when half a million people may be living in Albury-Wodonga, the quality of water downstream from that point will have specialised attention and care with the appointment of 2 environmentalists to look after possible pollution. I think it is absolutely correct to say that if half a million people live in an area nothing much can really be done to control pollution downstream. Although 60 per cent or 70 per cent of the total water requirements of South Australia come from the Murray, the State and- if one will forgive the comment- more importantly the towns downstream which I represent, have no protection built into any indenture agreement with the Commonwealth relating to the quality of water that will in future flow downstream from Albury-Wodonga and on which the State of South Australia is becoming more and more dependent. That was the reason behind my interest in the amendment. As I said, the Parliament, not just one or two people, accepted the amendment. The Minister for Urban and Regional Development, on behalf of the Government, said that he wanted to co-operate with the Opposition, and he agreed to accept the amendment I moved. Though I had described Professor Walsh as coming close to meeting this general description, the Minister pointed out that perhaps Professor Walsh should be described more accurately as being more than just close to meeting this description. We all departed extraordinarily happy. Everyone agreed that Parliament had done a good thing and we waited with interest to see what the Government did in appointing 2 persons who had specialised and expert knowledge in the preservation and conservation of the environment. Some time later the Minister made 3 appointments. My arithmetic does not seem to be quite correct, so I must imagine that one member of the Advisory Committee to the Cities Commission had resigned in the meantime. The Press release that I have before me is dated not 15 May 1973 but 6 December 1973, some 6 months later. The Minister appointed **Ms Anne** Gorman, a social worker and assistant lecturer at the Riverina College of Advanced Education at Wagga Wagga. Secondly he appointed **Mr McCartney, chairman** of the Development Corporation of New South Wales and assistant general manager of Petersville Australia. I hope that the House will note that neither of those persons could exactly be described as being an expert in the field of the environment or conservation. But a problem is added to the situation when we consider that after Parliament had accepted this amendment- after the Minister, on behalf of the Government, had accepted it- the Minister then appointed a person named **Mr Jack** Mundey, a conservationist and Treasurer of the New South Wales Branch of the Australian Builders Labourers Federation. I hope by now that the Special Minister of State **(Mr Lionel Bowen)** who is sitting at the table will begin to perceive the problem that exercises my mind. In all sincerity and honesty, on behalf of this side of the chamber I moved that 2 persons who had specialised and expert knowledge of preservation of the environment and conservation be added to the Advisory Committee of the Cities Commission for the very purpose that I have stated to the House tonight. But what have we got? We have got a bosom friend of the Minister for Urban and Regional Development from the far Left of the Australian political spectrum, **Mr Jack** Mundey, appointed to one of 2 positions that Parliament said- not only the Minister said it- should conform to the description of a person who was expert in the field of the environment and conservation. Instead of 2 such persons being appointed, we have appointed one person who in my judgment does not conform to the description that Parliament gave to the Minister and which the Minister accepted. I suppose that it is not for me to become political or anything like that in the adjournment debate, but it seems to me that bosom pal relationships can go far enough in this matter. If the Minister is buddy-buddy with Jack Mundey, that is his business, but I maintain that the Minister has not done the right thing by a decision of this House. There have not been 2 experts in environment and conservation appointed to the Advisory Committee of the Cities Commission. Anyone who tried to justify the position in that way would be guilty of great hypocrisy. That is the present position. We have got, I think, the present Treasurer of the New South Wales Branch of the Australian Builders Labourers Federation as representing, might I say, onethird of the Parliament's decision to appoint to this important Advisory Committee 2 people who were competent in the fields of the environment and conservation. The Minister has met the request of Parliament by one-third. As the person who moved the amendment I think that I am entitled to ask what has happened to the other two-thirds. Three extra appointments have been made in complete contempt, as I see the position, of Parliament which accepted this amendment on 15 May 1973. 1 do not know how honourable members opposite could justify the appointment of **Mr Mundey** in relation to the description that I have already given to the House. I suppose they will say that he interested himself in environmental matters in relation to strikes against green belt projects and other building problems in the State of New South Wales. {: .speaker-KJO} ##### Mr James: -- Concrete jungles. {: .speaker-KB8} ##### Mr GILES: -- I am quite sure that he was a very enthusiastic but misguided amateur in many ways. I think that even the honourable member for Hunter would not say that he conforms with the definition that the Parliament accepted. I expect that is true. {: .speaker-KJO} ##### Mr James: -- I have reservations. {: .speaker-KB8} ##### Mr GILES: -- I am sure that the honourable member for Hunter has reservations, but I think he will agree that I am perfectly entitled to raise this matter in the House tonight. I am sorry that I did not let the Minister know that I was going to raise this issue but I did not visualise that there would be an opportunity for me to speak in the adjournment debate tonight. To be quite proper I should have done so and I apologise to the Minister for not having done so. I hope that he will come into this House in due course and explain why he flouted the authority of the Parliament by appointing one of his bosom pals- Jack Mundey to two positions that this Parliament said should go to people who were expert in the fields of the environment and conservation. I think that needs an answer. I would be very interested if the Special Minister of State, who is sitting at the table and who seems to be the Minister for all things, at all times and in all places, could answer me. **Mr DEPUTY SPEAKER (Mr Scholes)Order!** The honourable member's time has expired. {: #debate-84-s3 .speaker-JRD} ##### Mr BOURCHIER:
Bendigo -In rising to speak in the adjournment debate I feel that I must say something about the Budget which was presented tonight. **Mr DEPUTY SPEAKER (Mr Scholes)Order!** The honourable gentleman would be out of order in debating it. {: .speaker-JRD} ##### Mr BOURCHIER: -In that case I will not say anything about the Budget, but I will say something about defence. Let us have a look at the defence situation. I think the only comment I could make about the Budget without being out of order is that defence was the last item in a Budget which was not in alphabetical order. {: #debate-84-s4 .speaker-10000} ##### Mr DEPUTY SPEAKER: -Order! The honourable gentleman would be out of order in making any comment on the Budget. {: .speaker-GY5} ##### Mr Staley: -Talk about the leaks. {: .speaker-JRD} ##### Mr BOURCHIER: -I do not need to talk about the leaks. One matter that comes to mind about the defence situation is that I understand that under the control of the Public Service Board-the new head of the Department of Defence is not now totally under the control of the civil service- we find that retired staff or retired gentlemen have been enlisted in the reserve forces. They are referred to as the retired list. They have now all been included in the reserve forces. An interesting situation arose in the Department of Defence the other day when it was looking for an expert in, I think, the linguistic field. It called on a chap who had retired some time ago and asked him whether he would be interested in working for the Government. He said that he would be delighted to do so but that at 92 years of age he felt that he was a little too old. That is the situation in our defence forces today. We are having to call on people who are 92 years of age to come to our assistance when it is needed. The growing list of officers retiring from the defence forces must be causing great problems for the Minister for Defence **(Mr Barnard)** and the Department in general. After all, many of the officers who are retiring from the defence forces are retiring not because of their age but because it is time for them to get out. They realise that there is no longer any future in the defence forces system, which is breaking down in every direction. One of the defence areas that has been brought forward for discussion is the purchase of tanks from the United States of America. It was brought forward by the Minister earlier in the year. Therefore I feel that I should be allowed to speak on it. It is very interesting to note that the tanks which are being purchased are being manufactured wholly in the United States of America. The reason for this is that the United States of America can provide the tanks at a cut rate. One wonders why they have to produce them at a cut rate. Apparently the United States Government has ordered that in no circumstances are the workings of the factory concerned to be reduced. The factory has to be kept going irrespective of whether there is sufficient work for it. The United States Government is therefore chasing around the world looking for orders to keep its own industries going. Should we not perhaps look at the parallel situation in our own country? Here we have a situation in which we are badly in need of work for our munitions and ordnance factories. It is no good saying that we could not manufacture these tanks. Our expertise in this field was shown during World War II when we were required to manufacture the tanks that we used. The end product was considered to be greatly superior to the English tank. The fire power was greater than that of other tanks in the field at the time. One is well aware that Australia has the necessary expertise to produce quality work and ability to produce the goods. Why is it that these tanks are being purchased overseas? If it is good enough for the United States Government to subsidise factories in that country in order to retain employees in their jobs, surely this socialist Government that purports to be so dedicated to providing full employment would be quite within its rights to subsidise our munitions factories to the extent of maintaining jobs for employees there and also the jobs of employees in private factories which supply extra parts. It appears that the Government is going off half-cocked in relation to defence procurements. Australian factories could provide the manufactured items and as a consequence also provide employment for people in Australia. This situation should be carefully looked at. It is an intolerable situation and it will, of course, continue because we will need other defence equipment and obviously the Government will purchase it from overseas. The same position exists in relation to unemployment in other fields. Let me refer to the matter of imported goods. I have raised this point before. Have honourable members noticed how quickly the Minister for Overseas Trade **(Dr J. F. Cairns)** has raced into the House to announce reduced tariff cuts and increased quotas to allow an onrush of imported goods into this country? We heard this morning one honourable member opposite ask a question about why the reductions on these goods were not being passed on to the public. The important question which he should have asked is: 'Why is it that such a large quantity of these goods is being allowed into this country thereby creating massive unemployment in the textile industries?' we are faced today with massive cuts in employment in the textile industries. Everywhere one goes within his own electorate or even outside it one sees growing unemployment. Every day in the newspapers we read of textile industries in trouble, and the problem is growing. No action is being taken by this Government to protect the industries. The Minister for Overseas Trade made a statement that there was adequate protection. He said that there was provision to assist industries that got into trouble due to the tariff cuts. This is not true. There are no funds available- I have checked this out- to allow an industry to carry on. The only assistance that is provided is that when a company folds up it can get some asset revaluation through the Government. I am sure that is a great help to a local industry that is about to be closed down and its employees put out of work. Perhaps the Government will offer some expert advice on how such a company might be able to continue. You cannot continue in business when the article that you manufacture is more expensive at the factory level than the article that comes in from overseas or when you find that goods from overseas are being sold with a profit margin- as the honourable member for Robertson **(Mr Cohen)** said-of 200 or 300 per cent and are still cheaper at that price than the actual factory price of goods in this country. If the Government is really concerned about this matter and is not dedicated to the obvious pursuit of trying to close down textile industries in this country because it considers them to be redundant and propped up, it is about time it took some positive action by cutting back on the quantity of imports into this country. The Minister has said that under the General Agreement on Tariffs and Trade we cannot reduce the amount of imported goods because the agreement involves other countries. But we do have a right under our tariff protection laws to reduce the quantity of imported goods under the quota system and we should introduce restrictions. The Minister is not taking any steps at all to protect adequately the working people of this country or to protect the industries in this country. The position may have been satisfactory when adequate employment was available throughout the metropolitan areas of Melbourne and Sydney and when an industry closed down the employees could walk to another job and get it without any worries. But those days have gone, and they have gone in a very short space of time. The Minister must indeed be starting to wonder, or worry, what is the result, what will happen, because the horse has galloped on him. He cannot afford for factories to close down now. The trade unions are starting to complain to him about it. I am wondering just what steps he will take to overcome this drastic situation. It is quite obvious he is in a cleft stick. He has either to back down to his Asian friends and allies- and the redder ones further up- or he has to back down to the trade unions, one or the other. I think that ultimately it will be a good test of power, and we will see who really runs this Australian Government or some of its Ministers, whether they are controlled by the overseas forces or by the trade unions. The whole of this country will be waiting in eager anticipation to see which side wins this battle, which side will provide the end result to the benefit of Australia. If there is to be a result it must be to make our industries viable to allow our industries to go on. There is one thing that the Australian Labor Party has always overlooked: That in its desire to socialise industry and to push the wage systems up it forgets that without industry there are no jobs for those who wish to be employed. {: #debate-84-s5 .speaker-JO8} ##### Mr BARNARD:
Minister for Defence · Bass · ALP -- I did not hear all of the speech made by the honourable member for Bendigo **(Mr Bourchier)** but I heard sufficient relating to the Government's decision to purchase tanks overseas for me to appreciate that he has, as in most other subjects, a complete lack of knowledge and understanding of this matter. The honourable member raises a subject about which the previous Government ought to apologise to this nation, for its complete neglect for not making a decision that ought to have been made long ago to replace the Centurion tanks now in this country. As I pointed out to the House some short time ago, the last tanks ordered for in Australia were ordered by the last Labor Government. It has taken the new Labor Government to replace those tanks. Of course the honourable member is on very weak ground, and obviously he has no understanding of the situation. In point of fact he is suggesting that we ought to build the tanks in Australia. That may be a very commendable suggestion, but the honourable member ought to look at the economics of the proposition. I have proposed that we should replace the Centurion tanks which, as I have just pointed out to the House, are about 25 years old and therefore are past their life. The cost of maintaining these tanks in the long term would be much greater than it would be to replace them, quite apart from the fact that they are no longer regarded as satisfactory equipment for the defence inventory of Australia. The honourable member ought to understand, when he talks about the United States of America and the tanks built there- he is referring of course to the M60-that no decision has been made by this Government. It has 2 options; either to purchase the M60 from the United States of America or to purchase the West German Leopard. When I made my statement on the subject I said that I would be making further inquiries from both the United States of America and West Germany to ensure that we get the best buy it is possible to get for Australia. That means not only to acquire a tank suitable for the Army's requirements but indeed also to acquire a tank under terms and conditions that would provide the best tank possible in offset arrangements for Australia. It is only in these circumstances and only in this way that it would be possible for this nation to replace the Centurion tanks. The honourable member suggests that we should have the expertise in Australia to build the tanks. But of course what he is proposing is that we set up in Australia the expertise and equipment to build the first order of 53 tanks. I am sure the honourable member would appreciate the cost involved in providing all of the equipment and the expertise that would be required to build 53 tanks only. That may be only the first pan of the order that is required by the Department of Defence and by the Australian Army. There may be more to follow. But to build 53 tanks and to set up all that is required to achieve that is beyond the capacity of this country. We would pay, not the amount we will pay for either the M60 or the German Leopard, but 3 times that amount and there would be no tanks to follow. The honourable member has no understanding of this problem. When he talks about the United States of America endeavouring to sell tanks around the world his statements may be true. But we will acquire 53 tanks. As I have already indicated to the House no decision has yet been made on whether we will acquire them from the United States of America because 2 types of tanks are under consideration. But those 53 tanks represent one month's production in the United States. How could we match that kind of production in this country in time of peace? There would be no further requirement to build tanks in Australia after we had set up all that would be required to build those 53 tanks. I think that the honourable member should do his homework in these matters. He often raises these subjects. But he has no understanding at all. If he has been advised by someone from the Department of Defence then he has been badly advised. Let me repeat for honourable members the position as it stands at this time. I have inspected both types of tanks. There has been a full evaluation by experts from my Department of both the M60 and the German Leopard tank. No decision has yet been made because, as I have said frequently in this House and publicly, whatever equipment we require for the defence forces of Australia we will ensure that it is acquired under the best possible terms and conditions. It will not be only a question of whether that item of equipment is the most suitable for the defence forces but also there will be the guarantee that there is a maximum amount of flow-back to this country in terms of expertise and offset arrangements. That is exactly what is being done at this moment. Let me indicate to the honourable member what can happen in these circumstances. The previous Government, formed by the Party to which the honourable member belongs, decided to build 3 destroyers in Australia. Based on 1972 costs the DDL program would have cost $335m. Obviously there would have been an escalation of costs. Before the program was on the drawing board the figure was $335m. It would be difficult to estimate the cost of those 3 destroyers in 1975 or 1976 when the drawings would have been completed. It would not have been $335m but probably closer to $500m for the 3 destroyers. When I investigated the program myself, I found that only 25 percent of those 3 destroyers were actually to be built in Australia. The rest of the destroyers was coming from overseas. That indicates that the honourable member has a complete lack of understanding of the problems involved in defence procurement in this country. I am satisfied that what the Australian Government intends in terms of its program for the procurement of tanks is the right decision. A decision will be made by April 1 975. Those tanks will provide not only an overdue replacement for the Centurian tanks but also the most modern equipment for the Australian armed forces. The proposal is to purchase 53 tanks as a first order. I think that we will be getting those tanks under the best terms and conditions which this country could hope to obtain from another country. Of course, in these circumstances the honourable member - {: .speaker-JRD} ##### Mr Bourchier: -- How are we going with the retired list? {: .speaker-JO8} ##### Mr BARNARD: -- Despite the interjection from the honourable member he obviously has no knowledge of this subject at all. It would be completely beyond the capacity of Australian industry to provide the expertise, as I have said, and the equipment to build 53 tanks and then to stop. No industry in Australia would be prepared to undertake an enterprise of that kind. The honourable member for Bendigo only displayed a lack of knowledge when he spoke tonight. He was on very weak ground, and I am sure that he will appreciate my point. The honourable member should understand that the tanks that will be acquired for the Australian Army will be the most modern that are available and that they will be acquired at a reasonable price and on a basis that will provide a maximum flow-back to this country in terms of offset arrangements and expertise. {: #debate-84-s6 .speaker-KJO} ##### Mr JAMES:
Hunter -- I fully agree with the reply that the Minister for Defence **(Mr Barnard)** gave to the honourable member for Bendigo **(Mr Bourchier).** I am sympathetic to the honourable member for Bendigo and I am grateful that the Minister for Defence only mauled the arguments that he put forward and did not reach the full heights of his own mental and physical ability as a debater. {: .speaker-EG4} ##### Mr Fisher: -- We thought he was up the pole. {: .speaker-KJO} ##### Mr JAMES: -- It was a case of a lion fighting a mouse. With great respect to the honourable member for Bendigo, I believe that he did not intend to speak on defence. The honourable member was out of his depth on this subject and the Minister was left to fight an uneven contest even though he was going only at half throttle. {: .speaker-JRD} ##### Mr Bourchier: -- I do not know whether the Minister answered my questions. {: .speaker-KJO} ##### Mr JAMES: -- I realise that the Minister restrained himself because he did not want to subject the honourable member to any more humiliation that was necessary. He believed in the words of **Sir Robert** Menzies- you should never annihilate your opposition but just defeat them. That is all the Minister sought to do. I will not detain the House for any length of time because it will adjourn in about 4 minutes. {: .speaker-JUS} ##### Mr McVeigh: -- You entertain us while we are here. {: .speaker-KJO} ##### Mr JAMES: -- Whoever invented the saying that empty vessels make the loudest raise was not far from the truth just then. The honourable member for Angas **(Mr Giles)** tonight criticised one of our Ministers for appointing **Mr Mundey** to the Cities Commission. I am almost sure that **Mr Mundey** served on the Cities Commission for only a very brief period and that he has resigned. I have some respect for the honourable member for Angas, because when he speaks in this Parliament he has usually checked out his facts rather accurately. However, I am sure that on this occasion he did not check his facts because I am reliably informed that **Mr Mundey** resigned from the Cities Commission some considerable time ago. I only wish that the honourable member had checked out the facts before he spoke tonight. If it is true that he made the reference in his brief speech- {: .speaker-KN9} ##### Mr Martin: -- I think he went off half-cocked. {: .speaker-KJO} ##### Mr JAMES: -- Yes, I think he went off halfcocked. I think the honourable member for Angas is the type of person who would only too readily rise in this House at the first opportunity and make the appropriate apology if he made a statement that was not correct. I believe that he would be only too ready to correct the statement that he made about **Mr Mundey** being a member of the Cities Commission. As only one minute remains before the House will adjourn I will not take up any more of the time of the House. However, I hope at some future time to enlighten if not the Parliament then the people who read Hansard or who listen to the radio broadcast about the effects of the operations of multi-nationals in the Western world and their contribution to inflation. With those remarks I conclude my speech. Question resolved in the affirmative. House adjourned at 10.59 p.m.

Cite as: Australia, House of Representatives, Debates, 17 September 1974, viewed 22 October 2017, <http://historichansard.net/hofreps/1974/19740917_reps_29_hor90/>.

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